[The cyclist] wants to continue straight ahead. What is the right course of action here?

Your answer to remain behind the cyclist is correct. According to German traffic rules, you should not overtake a cyclist when it is not safe or when it could endanger the cyclist. In this scenario, you want to continue straight ahead, and the cyclist is moving in your direction close to the curb on the right.

It is important to keep a safe distance behind the cyclist and wait until you have a clear and safe opportunity, such as a wider road or a dedicated overtaking lane, before passing. This ensures the safety of the cyclist and complies with the general rule to give vulnerable road users adequate space.

Therefore, remaining behind the cyclist and not overtaking is the right, cautious behavior here.