Dividing isn't absolutely necessary but pepper plants do okay being ripped apart and replanted. You can even plant them deep to get rid of excess stem although, unlike tomatoes, they won't root on the stem. If you leave it as is, it will require more water and nutrients because there's a lot of competition going on there.
Water deeply but in a bigger area to encourage the peppers to roots outwards away from the plant to lessen competition and add some fertilizer.
