Traumatized from
witnessing a dog fight? Never say never, right?
It would probably depend on the individual dog, it's temperament, and the owners reaction during the fight. But I seriously doubt that witnessing two strange dogs fighting would traumatize a well socialized dog of stable temperament.
Most dog fights are more noise, slobber and wet fur than anything else. IMO it's usually the owners that overreact and are traumatized more than the dogs.
If the dog itself was attacked out of the blue with no provocation, that could be another story. Even then a well socialized dog of sound temperament shouldn't be
permanently traumatized though they might be a little wary for awhile..