German raiders and cruiser risk

Did German ships have orders to avoid engaging the British?

Yes. They could outmatch many cruisers, but battleships and battlecruisers with much heavier guns were a different threat.

German raiders could overmatch many British cruisers but could not stand against capital-ship firepower. Guns in the 14- to 16-inch range would expose the mismatch for ships designed around commerce raiding rather than a battle-line engagement. The order to avoid British forces therefore reflected the danger of encountering battleships or battlecruisers, not an inability to fight every cruiser. Tactical superiority over a likely escort could coexist with strict strategic caution.