Honestly, I don't know for sure. But from what I have seen, Waymo seems to have really good situational awareness of different objects and path prediction. So if Waymo has the driving policy for how to handle this specific driving scenario, then yes, I would think they would be able to handle it.
I've seen this talked about it some presentations. The car must not only predict the actions of other other road users but also predict how those actions will change the actions of other road users. Here is something similar in a Waymo video. The car predicts that a cyclist will go around a truck parked in the bicycle lane.
As much as I love Tesla for the way it's brought EVs into the mainstream, and for building two of the three EVs I've owned, I think Waymo is the company to watch for driverless cars. My dream car would be a Tesla with Waymo FSD technology.
(My first EV was an absolute P.O.S. Zap Xebra. I loved it because it was electric. But it was Tesla that started making proper electric cars.)
In the video, the car predicts that the cyclists will go around a stationary obstacle. I think it increases the difficulty when it's a car that will move aside for a moving cyclist. Note that the car could actually remain in its lane without striking the cyclist. But a thoughtful driver will give the cyclist extra room. In the Waymo video, the cyclists have to go around the parked truck. Also, when approaching a cyclist going the same direction as the car, on the road shoulder, outside the driving lane, will the FSD car move over a bit to give the cyclist extra room? EAP does not. I always disengage to give cyclists and pedestrians extra room even when I would not hit them if I stay centered in the lane. I want my (future) FSD car to do the same.