I know this is reaching back a bit. I haven't seen Vampire's Kiss in almost thirty years and went on a nostalgia trip. After watching it, I think the reason for Peter's breakdown was the rabies.
>!Before his encounter with Rachel, there is a bat in his apartment. Bats carry rabies and in he effort to get it out of his apartment he might have been bitten. Then we see him start to spiral down when he has hallucinations and engaging in delusional behavior. He was always a big jerk, especially to his assistant Alva so no one noticed too much of a change in his personality. Maybe he contracted rabies, and it reaching his central nervous system fast. He probably did have a one night stand with a woman named Rachel but his mind made her into a vampire because it was infected with a fatal virus. All of his actions and delusions were probably the result of the fast onset of rabies.!<!