What is the right course of action now?

Your choice of braking and continuing on the right-hand lane is correct according to German traffic rules. When approaching a slower vehicle that is signaling to turn, you should reduce your speed (brake if needed) and remain in your lane rather than immediately trying to overtake.

The no-overtaking sign means you must be patient and not use the left lane to pass until the restriction ends. Overtaking in a no-overtaking zone is prohibited, even if the vehicle ahead is turning off the road. Moving without delay into the left lane would violate this rule and is unsafe.

By braking and staying in your lane, you maintain safety, follow traffic laws, and avoid illegal maneuvers. This also allows the turning vehicle to complete its movement without confusion or risk of collision. This approach is the proper way to handle slow vehicles signaling a turn on German rural roads.