I clench my teeth and brace for impact hoping it won't be bad enough to hurt my wheel or send me flying. How close I stay to the wheel in front of me depends on the familiarity and confidence I have with the rider in front and the general dynamic of the group. Something similar happened on a group ride on Sunday when the rider in front signaled the pothole too late, but fortunately I was able to remain upright which was tough given the size of the gravel and angle of the hole.