What does a circular sign with a red border showing a car overtaking another car on the left (left car red, right car black) indicate (Znak II-32, 'Zabrana preticanja')?

1. Overtaking of all multi-track motor vehicles is strictly prohibited (Zabrana preticanja)
2. Two lanes of traffic merging into one single lane
3. Left lane reserved exclusively for sports cars
4. Overtaking is permitted only on the right side