The Lusitania departed New York on 1 May 1915. The German Embassy in Washington had issued this warning on 22 April
Travellers intending to embark on the Atlantic voyage are reminded that a state of war exists between Germany and her allies and Great Britain and her allies; that the zone of war includes the waters adjacent to the British Isles; that, in accordance with formal notice given by the Imperial German Government, vessels flying the flag of Great Britain, or any of her allies, are liable to destruction in those waters and that travellers sailing in the war zone on the ships of Great Britain or her allies do so at their own risk.
Imperial German Embassy
Washington, D.C. 22nd April 1915
The sinking of the ship turned many against Germany and is said to have contributed to the entry of the USA into the war on the Allied side in 1917.
Remember that during WW1 Ireland was still a unified country and was still absorbed into the United Kingdom (recruiting for the British Army occurred throughout Ireland) whereas after 1921 (and so in WW2) the Irish Free State (the Republic) existed with Northern Ireland separated to stay within the UK.
In 1915 therefore Kinsale and its environs were, officially, "British."
This is a modern re-enactment of the sinking: