This is absurd. Where on earth are these "racist and horrible" Pepe memes coming from? In reality, 90% of uses of the Pepe character (which is now a fading meme) are as an avatar or highlight of a post's emotion. Seriously, the majority of all Pepes ever posted have been either a sad frog, a smug frog, or a happy frog. People use the meme to help express themselves along with their text, and then people spazz out worse than a bored housewife hearing about D&D in 1985 or NWA in 1995.
Peterson may not even be able to see the flag in the photo, but he has known about Pepe for a while, and even mentioned the meme in his livestreams as "interesting", possibly because as a Jungian psychologist he sees some association with Abraxas, which is a kind of "god of nature" / good+evil archetype in some of Jung's writing.