What is your assessment of this situation?

You answered correctly. In this situation, it is important to be aware of pedestrians who could behave unpredictably. The woman standing near the curb might step onto the road without paying attention, and the pedestrian with the moped could change direction suddenly. Both of these are realistic dangers you need to anticipate, so extra caution and reduced speed are necessary. Continuing to drive at the same speed would not be safe because you need to be ready to stop. Always be especially careful in situations with pedestrians near the road.