"It's the civilian form of a salute, traditionally performed by bowing stiffly, but not very low at all, from the waist, with your hands down the sides of your trousers. AFAIK, in older times it was also used by soldiers when they were not wearing headdress, since the military salute originated from opening the visor on the helmet. Depending on whether the man bowing had a military background (either formerly or presently, but wearing civilian clothes), he might also click his heels. Needless to say, women would not bow; they would curtsy or present their hand to be kissed, according to social rank."
I would have said something about clicking the heels too...
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