What is correct in this situation?

Your answer is correct because overtaking the cyclist in this situation is not allowed. According to German traffic rules, you must not overtake a cyclist when the road and traffic conditions do not allow enough space or safety margin to do so. Here, the cyclist is near a pedestrian crossing and there may be pedestrians preparing to cross, making overtaking dangerous.

Even if no oncoming traffic is visible, the proximity to the pedestrian crossing requires extra caution. Overtaking in such situations might force the cyclist to swerve or could endanger pedestrians. Therefore, the safest and legally correct choice is to wait and not overtake until it is fully safe and permitted.

In summary, overtaking cyclists near pedestrian crossings or where the road is not clearly wide enough is prohibited to protect both cyclists and pedestrians.