How big the peat pot is in diameter. You can always separate them , planting each in a pot of its own. If your peat pot is about 5" or bigger you can keep them together until plant out time.
In zone 7B, probably your are about 2 to 3 weeks away from your LFD. If that is the case, I won't repot them. UNLESS you are going to grow them in pots and right now you have enough room inside. In that case I will plant them in their final pot.

They're actually small square pots, about 2 inches wide. I'm planning on planting them outdoors in probably about a month. I'm just wondering if I can leave them together and have them grow as double peppers, or if that will stunt their growth and I might be better off just pulling one out.

I suggest that you snip one off at ground level in order that one pepper can grow alone. Unless they are extremely small and just planted, I wouldn't try to separate them.

In my experience, depending on how much root damage they would sustain, separating is rarely a death knell for seedlings.

If the roots are so bound and entangled that a good portion of them would be ripped apart from the plant, they may die (depending on the plant of course. I.e. onions and tomatoes can be pretty much separated by a bear cub and repotted then laugh at the encounter).

If the roots separate fairly easily, a little ripping and tugging wont hurt a bit. I just separated 3 week old peppers and put them in their individual pots yesterday. I only make a half hearted attempt at being gentile, so there was some popping and snapping as I pretend to care that 5-10 little roots were collateral damage. They all wilted for several hours and perked right back up to normal. I only thin seedlings when I'm feeling lazy or don't have room to grow them.

This post was edited by ZachS on Tue, Mar 18, 14 at 21:12

I find that it is easiest to separate seedlings when you dunk their rootballs into a large bucket of water. Tease the soil apart, shake them around a bit, and then tease the root systems apart. The downside of this is that they are more likely to suffer transplant shock, so be very careful to protect them from direct sun and wind during the first few days after transplanting.

Agree with everybody above. I've tried doing what you want to do as far as planting real close together. Some people say this is ok, but I found better production when I gave each plant the proper spacing.

Either do what slimy or zach suggests or snip one like rhizo suggests.

In either case, I would get them out of those 2" peat containers and into some 3" or 4" containers. Peat pots suck past germination and a month is a long ways away.

Kevin

Thin them to one per 4 inch pot, cut it at soil level.