Yesterday something happened that put me in an awkward situation and I'm curious how other cyclists view this:

We were heading north waiting at an intersection to proceed through - we have a stop sign and we're on the road patiently waiting for a break in traffic. However, a driver heading east stopped in the inside lane. I tried to wave her on but she remained stopped. This resulted in the car in the outside eastbound lane stopping. Westbound traffic was far enough away so... What would you do?

The intuitive option is to proceed and thank the driver on the way. However, it's a bit confusing. If I'm a vehicle as the law is here for bicycles I am supposed to follow the rules like any other vehicle. If I'm a pedestrian, the drivers response was indeed correct in allowing a pedestrian to cross.