What do you do when you see this traffic sign?

This sign warns that the road ahead will narrow on both sides. In this situation, you should reduce your speed and refrain from overtaking, because the road will offer less space and visibility. Always be prepared for oncoming vehicles and possible obstacles. However, you do not need to stop unless there is a specific hazard; stopping is not generally required just because the road narrows. Your answer is correct. These precautions ensure safety when the road gets narrower.