I know the laws and procedures aren't the same in every state... but I worked at a humane society for a year and we got a LOT of pit bulls, many from animal control. And as far as I know (unless it's different in other states) all animal control does is bring the animals to the shelter. The shelter has a separate area for pets where they aren't up for adoption, such as ones that have escaped that need to go back to their owners.
And the way it worked at my shelter just depended on whether the employees and people in charge thought the animal was aggressive. However, if it had been reported that a dog had bitten anyone before, then (unfortunately, regardless of the situation) it would raise their chance for being put down.
It sounds like the dog in your neighborhood isn't aggressive, although that's a very vague guess. But it also depends on if this dog is comfortable around strangers, which most aren't unless VERY friendly, and is able to be handled easily by animal control. Unfortunately (in my state that is) there are some animal control officers who are quick to judge bad things, even eager, if the dog is even slightly misbehaving.
So for your question about whether they would give it back to the owner: yes, unless the dog is obviously abused by them.
Slight rant... :/ This is kind of a political issue when it comes down to it. And it's hard to answer (like the others have said) because of it being such a controversial topic plus the differences in laws from state to state. Hope I helped, anyway... And I hope the dog gets well taken care of, whatever happens to him. It sounds to me like he just needs more attention. That's one of the top reasons dogs escape repeatedly.