I’ve never used peat as a substrate so I cannot comment on it from personal experience. It is naturally acidic and antimictobial though which is good. I’d recommend changing it after it gets soiled by the frog.

You mentioned two things in your post that caught my attention though. The misshapen jaw and the frequent handling are both potential causes for stress and stress equals a weakened immune system. A weakened immune system is an open door for opportunistic infections that fit into the red leg spectrum. I’d recommend handling as little as possible unless the jaw condition requires it. Wear gloves when you handle and keep everything clean.