Long fiber sphagnum moss and sphagnum peat moss aren't interchangeable. And the quality of sphagnum moss products I have found varies considerably. I like the more expensive long fiber sphagnum moss from New Zealand, which didn't have little sticks and a lot of dust in it. I have used it to sprout seeds that take a long time to germinate, like clivia. I have also used damp sphagnum moss to stimulate new roots in clivias that have lost most of their roots to rot and to grow roots on plumeria cuttings. I've used it successfully in air layering ficus plants. I also mix a little with fir bark for phaelanopsis orchids.

I don't believe it has any nutrients, so I wouldn't use it to grow an annual, like peppers. I doubt it would work well as a component of a potting mix for them either because the best mixes need to have components of equal size to retain water and drain well. If you haven't read Tapla's threads on container mixes and water retention, I highly recommend it.

In addition, I think it's important to saturate the sphagnum moss before you use it. It can be quite water repellant. I use boiling water to saturate it before using. Then allow it to cool and squeeze out excess water before proceeding.