What do you have to observe in a traffic situation like this one?

You answered correctly. In situations where an obstruction is present on your side of the road, German traffic rules permit you to cross the center line to pass by the obstruction (such as a person with a bicycle). You may also cross the center line to overtake if it is safe. However, you must never cross if doing so would endanger other traffic. All three answers are important: only cross safely, and always be aware of other vehicles before doing so. This ensures both your own safety and that of all other road users.