The first number is related to the assistance level, that increases the power delivered by the rider by a factor of 3.2x at 100%
So, if you deliver 100 watts with your legs, at 100% assistance the motor will deliver 320 additional watts, 420 watts in total.
if you deliver 100 watts with your legs, at 50% assistance the motor will deliver 160 additional watts, 260 watts in total.
And so on.
The second number is related to the maximum power that the motor can deliver.
At 100% PP, the motor could deliver (just for a short time) 700 watts of maximum power.
If you limit this peak by 50%, the motor will deliver 350 watts of maximum power.
Just another example to clarify:
If you deliver with your legs 200 watts at 100% assistance, the motor will deliver 640 watts. This happens if you don’t limit the peak power, leaving it at 100%.
If you limit the peak power by 50%, you are asking the motor to deliver no more than 350 watts.
In this case, in the example above, if you deliver 200w with you legs, you will get only 350 watts from the motor.
This means that, with low assistance levels, the Peak Power setting has no influence on the motor behaviour unless you are delivering very high levels of power with your legs.
Hope that the attached excel file could be more clear than my words:
EDIT: better excel file
Download and play with the excel file: you can change the Peak Power setting to your desired level, and see the changes in the table below.