Etiquette for Withdrawing Apps/Canceling Interviews; how & when to withdraw from an ongoing hiring search without disrespecting hiring manager? might have to work alongside them in the future

Essentially, I applied for a position in my former uni's main library a few weeks back and have advanced to a second interview with the library chairs next week, but a very similar job in another library at this uni opened up a week ago and I applied.

For context, I worked in this second library as an undergrad, I know the majority of the staff, and I was even sent the job posting by my former boss in that library as well as the person leading the hiring search. So I applied without thinking twice about it and I feel confident about my chances, but now I'm worried that I might have to reject an offer by the first hiring manager later down the line so I'm heavily considering withdrawing my application and canceling my follow up interview. I don't want to waste their time and since these two positions are so similar, just in different libraries, I couldn't say that I found a "better" opportunity elsewhere because I would definitely run into these people on a pretty regular basis.

I know that I'm making some assumptions here, but maybe I'm overthinking this situation. Is withdrawing even a smart move at this step in the process and, if so, would a respectful message to the first hiring manager suffice? Open to any advice, but I'd appreciate hearing from the hiring side too.

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