What is the correct course of action in this situation?

Your answer to remain behind the cyclist is correct in this situation. According to German traffic rules, when faced with a cyclist on a single lane road with oncoming traffic, you should only overtake the cyclist if it is safe and there is enough space to maintain a sufficient lateral clearance (usually at least 1.5 meters in urban areas). If these conditions are not met, you must stay behind the cyclist and wait.

This rule is important to ensure the safety of vulnerable road users like cyclists. Attempting to overtake without enough space can cause dangerous situations. Additionally, you are required to signal your intentions clearly when overtaking, by using your turn signals before moving into the oncoming lane and before merging back, to alert other road users.

Therefore, the safest and legally correct option is to stay behind the cyclist until it is safe and permitted to overtake with enough side clearance.