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I watched some of the old schutzhund (US) nationals on DVD and was surprised to see a number of dogs doing the paw-raise when waiting for a rebite.
Now some of these dogs were clearly very strong dogs. They bounced up and barked right in the helper's face when doing the bark and hold and were always staring right at the helper's face (didn't see any avoidance of any kind).

It just seems extremely unlikely to me that those dogs - with such strong defensive drives and confidence - would be showing submission to the helper.

LOL! Most dogs that reach high levels in Sch have been trained with pretty hard compulsion. Especially Europeans, they like for the dog to "respect" the helper. If you want to see some stuff that will drive PETA crazy, go watch some European's work dogs. Then you will see why some dogs might be submissive to the helper.

Dogs that do a nice B&H aren't neccesarily super strong dominant dogs, all it means is they have enough decent nerves to figure out that the helper they're barking at is going to do the same thing he's done the other 2763 times he's done the B&H in training. Jumping up barking in the helpers face doesn't mean much. You can train a border collie to do that. Looks impressive to the crowd, but really serves no purpose.

Sch is one of those sport where the helper plays a big role in controlling the dog, especially in the B&H, the helper is there to dominate the dog and control him, while also trying to submit to him at the right time, and trying to elicit a mean face from him so he looks good, as well as manipulating the dogs position so they are straight in front.

I don't remember seeing Nick vom Heiligenbosch lifting his paw at the helper

But hey dogs are kooky animals with weird quirks, but any time I have seen a dog lower their tail, tuck their tail, or lift their paw during a sport exercise, and inquired to the dogs background, the answer is pretty much always "the previous owner was too hard on him", "someone screwed the dog up before I got him" etc. Mal's are really big tattle tails (ha, I said tail). You can see their emotions in their tail very clearly.

I think one needs to look at the whole complex of drives to understand what is going on. I've heard these arguments before and they just don't satisfy me. It's seems to me that the dog is always in a position where they are about to aquire the prey and it just reflects an anticipatory feeling going on in the dog. If the dog is feeling particularly defensive I don't think your going to see it as much. I see it more when the dog is working in the prey drive and again more specifically in the acquisition phase.

Great explanation Mike, I stand corrected

(I still think the paw raise can be a purely prey reaction, but I now realize how difficult it can be to tell for sure).