Who has the right of way? Us or them.
Depends on the country. I’ve found that in Canada both sides give way to the point of stalemate. In Spain and Italy both sides assume right of way and just pull out, the other guy sits on his horn and tailgates for 2 miles. In England one will pull out infront of the other, and the other guy will swear at the other guy whilst locking his door. Ooops, I digress.
In those situations I always drop downwind. When I was windsurfing and knew nothing about kites, having the lines/kite come above me used to freak me out. I just extend courtesy to the other guys and get out their way. It seems to be appreciated every time.
In UK, sailing rules are that starboard tack has right of way i.e. moving to your right with back to wind, so in this picture the kitesurfer has right of way. Common sense should always prevail though and etiquette over wave riding in my opinion i.e if someone is riding on a nice wave or setting up for a big jump, I get out of their way! Never had a problem at my spot - everyone happy just to be on the water and never too busy.