You are perfectly right about (1) and (2).

To write a similar sentence in active voice you’d use:

Il les avait laissé le dépasser. (He let them pass him.)

“Les” stands for “them” (alternatively you could use “la” for “la voiture”). Le stands for “him” but since “he” and “him” are now respectively the subject of “laisser” and the object of “dépasser” there is no need for a reflexive pronoun. French and English constructions are very similar in this respect.

Note: if you omit the le in the active statement, as your replacement suggested, the reader would be lost as it strongly suggests that the passing/overtaking applies to a third party. In French, the le that stands for the previous subject is generally made explicit. It could be omitted, but only if the situation is very clear to the reader already and the act of passing/overtaking itself is significantly more important than to whom it applies. Also, in any case, if you don’t use a reflexive pronoun the auxiliary should be avoir.