Based on the symptoms described—young bell peppers wilting/collapsing on the plant, turning dark to black, and developing white mold-like growth inside—the problem is Phytophthora blight/fruit rot, caused by Phytophthora capsici. University of Minnesota Extension describes pepper fruit affected by Phytophthora blight as developing soft, water-soaked spots; infected fruit may wither while still attached and become coated with white fungal growth. The same Extension source notes that the disease can also cause whole-plant wilting and dark stem lesions, and that it spreads rapidly under wet conditions.

This does not sound like classic blossom-end rot alone. Blossom-end rot usually begins as a tan, sunken area on the side or bottom of the fruit and is caused by calcium/water-stress issues, although secondary fungi or bacteria can later invade the damaged tissue. Anthracnose is another pepper fruit rot, but University of Minnesota Extension describes it as sunken, round fruit spots on ripe or overripe peppers with dark centers and pink spores under moist conditions. Sunscald can also lead to black fungal growth on injured pepper tissue, but the typical first symptom is a bleached or tan, papery area on the sun-exposed side of the fruit.

Recommended treatment and management: Remove and discard infected peppers immediately; do not compost them. If an entire plant begins wilting or has dark, water-soaked lesions near the soil line, remove the whole plant and put it in the trash. Avoid moving soil or tools from the affected area into clean beds, because Phytophthora can move in contaminated soil and water. Improve drainage by using raised beds, reducing overwatering, and avoiding low, wet areas. Switch to drip irrigation or water at the base of plants and avoid overhead watering. Mulch can help reduce soil splash onto fruit. Space and stake plants to improve air movement and keep fruit off wet soil.

For future plantings, rotate away from susceptible crops for at least three years where Phytophthora is suspected. Avoid planting peppers, tomatoes, eggplants, beans, squash, pumpkins, cucumbers, melons, and other cucurbits in the same infected bed during that rotation period, because University Extension sources report that Phytophthora capsici can infect peppers, tomatoes, eggplants, beans, and cucurbit crops. If this bed stays wet, prioritize drainage improvements before replanting susceptible vegetables. Consider resistant pepper varieties where available. Fungicides are preventative and are most useful before disease becomes established; if you choose to use one, confirm that the product is labeled for Phytophthora bright on peppers and follow the label exactly.

Risk to nearby vegetables: Hot peppers are at similar risk as bell peppers. Eggplant, tomatoes, and beans can also be susceptible to Phytophthora blight under wet conditions, although severity varies. Cucurbit crops such as squash, pumpkins, cucumbers, and melons are also important hosts. Peas and carrots are less likely to be affected by this same pepper problem, but carrots and beans can have other white-mold or soft-rot diseases, so good sanitation and moisture management are still important. Remove diseased fruit promptly, avoid splashing soil, and monitor nearby plants for wilting, water-soaked lesions, or soft fruit rot.

University Extension references used: University of Minnesota Extension, “Pepper > Fruit > Rotted fruit,” describes Phytophthora blight symptoms on pepper fruit, including white fungal growth and wilting. University of Minnesota Extension, “Managing phytophthora on farms,” notes that Phytophthora capsici infects peppers, tomatoes, eggplants, beans, and cucurbits; survives in soil and plant debris; and is favored by warm, wet conditions. This article can be found here: What's wrong with my plant? : Garden : University of Minnesota Extension University of Maryland Extension, “Checking for Phytophthora blight,” recommends confirming the diagnosis, protecting clean beds, improving drainage, removing infected plants, rotating away from cucurbits and solanaceous crops for three years, and using labeled fungicides where appropriate. The article can be found here: Checking for Phytophthora blight | University of Maryland Extension University of Maryland Extension, “Fungal and Bacterial Diseases of Vegetables,” emphasizes prevention through drainage, healthy plants, sanitation, crop rotation, and avoiding wet foliage. University of Maryland Extension, “Sunscald Very Prevalent in Peppers This Year,” notes that sunscald injuries can become covered with black fungal growth, which helps distinguish secondary mold on injured fruit from primary Phytophthora fruit rot. The second article is located here: Fungal and Bacterial Diseases of Vegetables | University of Maryland Extension

Thank you for your question and have a great gardening season.