What is the right course of action?

Your answer is fully correct. According to German traffic rules, when you encounter a junction with the "priority from the right" sign (the sign shown in the image), you must give way to vehicles approaching from the right unless otherwise indicated.

In this situation, the motorcycle is coming from the right, so you have to allow it to pass first. However, the bus is coming from the left, so it does not have priority over you. Since you are going straight and the bus is turning right, you have the right of way before the bus.

Therefore, you correctly identified that you have to allow the motorcycle to pass (option 1), and you take priority before the bus (option 2). Option 3 is incorrect because the bus is not given priority here.

This rule helps maintain order at intersections without traffic lights and ensures safety by following the basic "priority to the right" principle.