the medium is extremely peaty ... leading me to think it is either extremely sodden.. or bone dry ...meanign you have a drainage issue ...

leading me to think that you are rotting off the roots via on of the root diseases ... of which there seems to be a plethora of posts on such lately ....

without a pic of a dead one... its hard to go much further than speculation ... did the stem.. immediately at soil surface .. brown and collapse????

please stop trying to self medicate ... i would never spray a seedling of that age with anything... let alone a drying agent like HP ... [i owuld even be afraind of spraying water.. for crushing the darn thing]

and you wasted the cinn ... as there are no bugs... there is some french toast crying out in shame ... lol ..

ken

They wilted at the tip of the leaves and then eventually the leaves were dead, which lead to the stem turning brown until it callapsed over. Also, I just transplatted the one in the photo into seed starting mix. Will it help it?

You were right about the soil. One that I took out was like mud, and another was like sand.

Potting soils and seed starting soils are made of peat moss, coir, finely ground bark or a combination of those, with either perlite or vermiculite added to promote drainage. Some people use regular garden soil, something not recommended by any one that has spent much time and energy starting seeds for a large number of reasons.
Soils that are too wet will keep seedlings from uptaking and using the nutrients they need to grow and can harbor all kinds of disease pathogens which can kill those seedlings.
What ever is used to start and grow seeds needs to be moist but not wet.

Most likely you have just seen the symptoms of "damping off", the result of a fungus in wet/cool soil. Or it could be just plain old drowned roots from, again, too-wet soil. Both initially appear as drought since the plant is unable draw enough water to support turgor. Unfortunately that leads the too-caring gardener to water even more!

Good luck,
Dennis

Can the potential issue (root rotting or disease) be cured? Or does it get infect the plant until it dies?

potting media .. is all about water management ... so that when you water at the top.. the proper amount goes out the bottom ...

all peat... is basically a sponge ... all in the top.. NOTHING out the bottom .. and then it can take a month to dry out .. all the while.. having big gaping gobs [??? lol ] of totally dry stuff in the middle .. just a nightmare to use.. as you are finding out ...

no you can not fix it.. if you leave it in that media ... IMHO

go buy some good media.. from a good nursery and talk to the manager about the project .. rather than bigboxstore.. and get some 4 or 6 oz solo cups from the grocer ... slice the bottom edge with a razor at 3 points ... dampen some potting soil... and repot your seedlings... it will probably end up costing you less than some exotic chemical .... and save cinnamon ... lol ..

ken

They were raised in peat pots so I'm not completely able to remove the peat, but I trasplanted them into seed starting soil, which doesn't seem to hold that much water, to help keep a good amount of water in the soil. The plants have grown their "true leaves" which seem completely healthy, but their first two starting leaves are still shriveling up. Should I remove the dying leaves?

Nah. Just leave them alone and they'll fall off all by themselves.

You seem to be concerned that the plant won't get enough water now. Let the surface of the soil dry out. It does NOT need to "look" moist. Get a bamboo skewer and stick it in the soil and leave it. When you want to know if the soil is wet enough, pull out the skewer. It will be dark at any level that the soil is sufficiently moist for the plant.

Or just wait until it wilts a little. Peppers prefer it too dry than too wet; wilt won't hurt them at all.

Dennis

BTW, no matter what the manufacturer says, remove the peat pot when potting up. It may take a few roots with it, but the plant will benefit greatly. Peat pots act like real pots in that they constrict the roots. I've seen plants in large pots with no (or very few) roots beyond the original peat pot.