What is the right course of action now?

You answered correctly by choosing to slow down to walking speed and to drive as far to the right side as possible when passing a pedestrian on a narrow road. According to German traffic rules, when encountering pedestrians on the roadway, especially on narrow or curved roads where visibility is limited, you must reduce your speed significantly to ensure their safety. Driving at walking speed allows you to react promptly if the pedestrian unexpectedly moves onto the road. Moving as far to the right as possible increases the lateral distance between your vehicle and the pedestrian, providing additional safety. Simply driving past without slowing down would be dangerous and is not permitted, as it does not ensure enough safety for the pedestrian. This approach reflects the principle of driving within sight distance ("Fahren auf Sicht"), which requires adjusting your speed and position to the conditions and hazards present on or near the roadway.