What is the right course of action here?

You answered correctly. In this situation, German traffic law requires you to slow down and wait when necessary, especially if other vehicles or road users (like pedestrians or cyclists) could be put at risk. Even if you have right-of-way, you must always be ready to yield if safety demands it. "I slow down and wait" is the correct response because defensive driving means adapting to the specific traffic situation and prioritizing safety over your right-of-way. This approach prevents accidents and is expected during the driving test and in real-life road situations. Always be prepared to stop or let others go if the road is narrow, visibility is limited, or if there are obstructions that make the situation unclear.