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OH! does this bring back a couple of memories....
If he is indeed embarrassed, my first thought would be he would back away a step and lean in or bend forward at the waist when walking up to hug you.
You could back away a bit if you do not want to be that close. Of course, you could also press up against him and say absolutely positively nothing.
As to what to say, well, you two have a history and you know his behavior with all this. Perhaps there is a cute quip that can be said to defuse any potential embarrassment.
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