I think this scene shows Peter's gentle concern and love for Neal, while also, like you pointed out, gives Peter an opportunity to end the estrangement that he doesn't take.

And, poor Neal is pretty sad and pathetic at this point in the story, which makes it that much more emotionally compelling for me when Peter can't give Neal what he needs.

Yes! You definitely showed that with this scene--the push and pull inside of Peter and Neal's utter miserableness. ♥