Joel and Nora were recognized as siblings in the eyes of the law, but in terms of blood relations, they were actually cousins. Although this meant that Peter and Mia were already a generation apart in blood relations, they were ultimately still second cousins. Therefore, they still couldn't be together.
He knew that his parents didn't care about such things. If he and Mia made up their minds to be together, even if they didn't hold the actual wedding itself, his parents would still give them their blessings.
However, he knew that Mia loved kids, and people in consanguineous marriages easily produced children with deformities.
In that case, he'd rather suppress his feelings than end up causing Mia to regret her decision in the future.
She was only fifteen; she still had many more years ahead of her. Peter didn't want to hold her back and cause her to have to pay for her folly in her youth after she grew up.