It can be a sign of fear and stress in sheltered dogs. Some shelters will let you take them out for a walk just outside. If you can take him outside for a little walk, see if he relaxes so you can notice any change in them in the natural daylight.
Ask if he's had a good physical exam and call it to their attention. If you tell them your interested in adopting the dog but don't want to take a dog with eye problems or with another physical problem this could be a symptom from, maybe they will do a more intensive medical work up on him to try to get him a good home.
Hopefully it's just coming from his stressful environment, I've adopted shelter dogs and know that they become nervous and scared from all the noises and different dogs around them. A puppy might be even more afraid if he's just been separated from his mother and coping with that also..
I hope he's fine and can get a good home, and it's great your friend is adopting instead of buying a dog.. good for her.
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