Being from Kalifornia I could not carry openly even if I wanted to in most urban areas. If the situation you describe happened in Kalifornia and you were in a place that it was legal to carry openly and the person reporting you wanted to sign a complaint, probably the least that would happen was that your firearm would be seized as evidence and held until the matter was investigated and adjudicated. It could be even worse if his story is believed.
As for open carry, I would not carry openly even if I could. Why warn the BG, let him be surprised. Also if the BG is armed you are advertising the fact that you have a $500 to $1000 item on your hip.