I think that our two quaker parrots (Rosie and Jessie) have some kind of death-wish. We have a 6 month old Bichon-Poo and the birds insist on getting down on the floor when we are not in the room knowing well that the puppy is down there. Being a friendly puppy she does not seem interested in deliberately harming them in any way, but she is playful and jumps over and around them and nips at their tails, barks and generally scares the heck out of me, yet the birds seem oblivious to the potential danger that a puppy presents. This has happened about 10 times so far. I find it rather strange given the birds' mortal fear of balloons and shopping bags that they would not want to be anywhere around a dog that could actually harm them if it wanted to.

These birds have a massive cage with plenty of food toys and water but for some reason they only come down off of it when they know that the dog is around. Am I overreacting or do the birds know what they are doing?

I would put the dog in another room & shut the door when the birds are out.
One nip is all it takes and you might lose a bird.

The problem is the birds are always out and so is the puppy.