Very big of you to come on here and apologise - very few people would do that.
The primary learning point here appears to be that which is most common in driving incidents, i.e more anticipation needed - the 'what if?' question.
So, prior to initiating the overtake:
1. 'What if the cyclist wobbles or swerves?' You gave him plenty of space, so fine.
2. 'What if someone emerges from the junction on the left which I know to be there but can't see?' In that case, the cyclist might well swerve a great deal, using more space than you could provide during the overtake. That's (in part) why there's a 'do not overtake at junctions' statement in the Highway Code. So that anticipation would lead to your choosing not to make the overtake.
3. 'What if the car coming towards me moves into a right turn postion at the junction?' The fact that they shouldn't move over, or didn't need to, isn't material. The fact is that they both could do it and might do it, so again the overtake shouldn't have been made. (If you couldn't see far enough round a bend such that a car could appear and block the opposite lane during your manoevre, that's yet another reason why it was an inappropriate point to overtake - you didn't have time/space.)
Your passenger's assessment may have been right given where you were at the time, but you should have anticipated the above possibilities (2 and 3, not just 1) and then chosen not to overtake, thereby not being where you were when the car unexpectedly moved towards you.
No-one was hurt, physically, so this is a useful learning experience and may well help you to really anticipate and ask 'what if?' more in the future, which is a very useful outcome. Anyone who claims they've never done this sort of thing whilst driving has either never driven or is 'unusual', so just do as you are and learn from it. (EDIT: 'this sort of thing' meaning 'failed to anticipate all hazards correctly'.)