Best practice to have you limited to maintain 2,500ft whilst other aircraft is on not above 2500ft? No. That leaves only the other aircraft open to altering vertical profile.
Were you actually forced to the same point in space, at the same time? Not really, both aircraft could adjust route towards the 07 threshold to transit at different times. (Sounds like there were potential departures from RW07 at the time, hence the necessary adjustment to the other aircraft routing.)
Was traffic info passed? Yes. Although the report acknowledges this was late.
Report doesn't make clear if the inbound had already been cleared to 3000ft but that's possibly why your request for 3000ft was not approved and an orbit offered instead.
I guess it's interesting in that ATC gets lambasted for over-controlling VFR in Class D at times and then for not separating VFR at other times. It's about responsibilities, ATC's and yours.