We analyze the population dynamics of a microbial cross-protection model and derive the exact conditions under which a Fold–Hopf bifurcation emerges. By applying center-manifold reduction and normal-form theory, we reduce the infinite-dimensional delay differential system to a finite-dimensional ordinary differential system, enabling rigorous bifurcation analysis. Numerical simulations reveal a rich repertoire of dynamical behaviors, including stable equilibria, sustained oscillations, and noise-induced irregularities. Our findings identify time-delay-induced Fold–Hopf bifurcation as a fundamental mechanism driving oscillatory coexistence in cross-protection mutualisms, for previously reported experimental observations.