Oh, how nice of you to rescue this poor animal and nurse him back to health!!! One never, or seldom, knows the background of these dogs. I know what you mean about the nibbling also. I've seen a number of small breeds do this. I take it this is an adult dog? This is common behavior in puppies and one way they learn from their *Mom* and littermates their acceptable and unacceptable behavior. This may be some type of bonding behavior fro him. It may be a testing behavior. It may be cute now but you don't want that to escalate beyond nibbling. I agree with ginger in that it should be discouraged. You can *Yelp* when he does this, turn away and ignore him for a minute or so. You can do the firm NO and again ignore him. Hopefully, he will learn this is not acceptable behavior and he gets no award or attention when he does it. Of course, you don't want to backtrack on his social improvement and you don't need to be loud or angry, just firm. I know, it is cute though. LOL
I know what you mean. They are not really "bites" just little nibbles.
I know your dog has suffered. But dogs live very much for the moment so he will be willing to learn with you. They are also very intuitive so he will sense that you mean him well, even though the trust is still being built.
There is no harm in gently moving away from his "nibbles" and saying no. In a firm but gentle voice. He shouldn't be upset at that but it will show him your boundaries. What you like and what you don't like.
It is important that he learns your ways, and to trust you, not only as a friend who has helped and rescued him, and is kind, but also a good trustworthy leader.
It's my belief things like that will start to make him feel more secure with you.