What should you do here?

Your answer is completely correct.

In this situation, you should greatly reduce your speed because the road surface ahead is damaged, which can affect vehicle stability and safety. Continuing to drive in your own lane is also important to maintain control and avoid unnecessary risks, especially since driving to the left past the damaged surface might not be safe or allowed.

According to German traffic rules, encountering damaged road surfaces requires you to slow down significantly and stay in your lane to maintain control and ensure safety for yourself and other road users. Driving to the left, especially if it crosses into the opposite lane or an unsafe area, is not recommended unless explicitly allowed or necessary.

This combination of greatly reducing speed and staying in your lane is the proper response to such road conditions.