I like this. It shows that Peach refuses to be treated like some kind of prize to be fought over. She's a person first and foremost so she made the mature decision to just walk away and leave the two to just get over it on their own. It seems cold at first but its the right step to earning some respect for herself.

I don't really care about this one way or the other, it's a Mario game after all, but hasn't Peach shown a bajillion times before this that she DOES like Mario back? Sure he's being a bit pushy in this one scene, but they have literal years of G-rated relationship stuff before now, so it feels incredibly off for her to only just now give him the cold shoulder with regards to his affections towards her.