Sidewalks are pretty dangerous places for cyclists. Your brain was probably reacting to the fact that cyclists shouldn't really be on sidewalks.
As far as who has the right of way- I'm not sure what the law says. My gut reaction is that the cyclist would have to wait, but when I think about it- they probably have the same rights as a pedestrian on a sidewalk (and probably the pedestrian has the right of way?)
I almost never ride on sidwalks, but there is one short section of my commute to work where I can get on the sidewalk and go against traffic as a result (thereby avoiding 2 annoying left turns). I have to cross the exits to 2 parking lots- I'm always very careful to make sure no one is coming or going- so something in my gut makes me think I don't have the right of way when I'm on the sidewalk.



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