Jeffem wrote:this happened during my annual check ride with a Senior Observer so the implication is that I should know better.
To my mind the reason for the critical comment is clear. While (in my view) there is no problem with a slight overhang as long as the wheels don't cross the line and as long as it is safe, there is also the question of the impression it may give to less experienced road users.
From your own description, the overtakee was not very experienced, and seeing you passing may have given them the idea that it was acceptable to ride in that manner. While (in my mind) it is acceptable for an experienced rider to do it, I think it may be a lot more risky is an inexperienced rider tried to follow your example of riding position without the skill, observation and judgement to ensure it was carried out in safety.