I am flummoxed as well, have never seen anything to indicate that any peony could be grown from straight stem cuttings. Air layering for woodies, yes, but not just a stem cutting.
Back to the original question—there could be lots of reasons for shocky looking foliage but most likely the root is just not able to keep up with foliage demands. Actually those don't look bad at all for being planted as bare roots late in the season. Basically you planted a storage root. It grew foliage as it's programmed to do in warm soil, put out as much growth as it could but I'm sure it's not grown any feeder roots to resupply the main root—those normally only grow in cooler soil in early spring and fall. The storage roots could be tapped out for the season, hopefully it'll start some below soil growth as your temps drop and recover to put out more growth next spring. I'd just put it in a cool, shady spot, maybe some sun in the morning only, until it goes dormant.
