What must you heed in this situation?

Your answer is fully correct. In this situation, when passing a stopped bus at a bus stop where passengers may be boarding or alighting, you must pass at walking speed only (option 1). This is because pedestrians, especially children or elderly, might suddenly step onto the road. Additionally, you must only pass if you are sure that no passengers will be endangered (option 2). This means carefully observing the bus, waiting for passengers to safely clear the road, and ensuring you have full visibility and control to avoid accidents.

The third option, not passing under any circumstances, is incorrect because passing is allowed but with strict caution. The rules protect pedestrians by requiring very slow speeds and ensuring their safety before passing. This combination helps you recognize the need for caution near bus stops where passengers may be nearby.