This is what bothers me about competitive cycling on public roads. I've never been able to quite get it straight in my head that it's OK.
Releasing competitors into the traffic because "that's the way our event works" invites situations like this. Also, the cyclist is probably much more bothered about his time, and getting into his rhythm than he is about how far away he's riding from the kerb, and traffic.
Some TT courses involve T junctions from minor to major roads. If you are racing against the clock, are you really going to give way properly? One of the North Norfolk TT courses uses a very tight radius roundabout on the busy A148 that is a bugger when it's wet, Is that really safe?
Having said all that - yes, the cyclist in the photo is being passed too close - no question about it. You have the number of the car. Complain to local police if you have a mind...