The Helpful Gardener wrote:Problem there is you will likely damage the root system of the good plant extricating the lesser one. Just cut them... studies show that old dead root systems create natural channels for new root systems, so there is an up side...
Actually, there may be a way around this. I don't know if it will work for peppers, but it will for tomatoes (I've done it
Cut the seedling as close the to soil as you can, then just re-plant the stem and there's a chance the stem will develop a new root-system. The plants may be a few weeks behind since they have to develop new root systems, but they will still live.
I did this with tomatoes when they barely had their first true leaves showing, but they have almost caught-with the other seedlings that were left alone.