First off, it's important to remember that the peer
functionality in tailwind doesn't target parents (which is what you currently have). You can only target elements that are next to one another.
Additionally, because of how the CSS :peer
combinator works you can only target previous components, meaning the checkbox MUST come before the peer who's state you want to affect when the checkbox is checked.
<label
htmlFor="choose-me"
class=
'flex w-fit items-center justify-evely p-3 text-grey-8 relative'
>
<input type="checkbox" id="choose-me" class="peer mr-3 relative z-10" />
<div class="absolute inset-0 border-2 border-grey-4 peer-checked:bg-indigo-200 peer-checked:text-indigo-800 peer-checked:border-indigo-800 peer-checked:block z-0"></div>
<span class="relative z-10">Check me</span>
</label>
Here's an example that works using pure tailwind/css, assuming you don't want to handle the state in your react component, as per @Vikesir's comment (though that was my first thought as well and it's a good idea).
You'll notice I'm fudging in an empty div and using that to simulate the background and border changing. I also wrapped the label text in a span to make sure I could change it's z-index so that both the checkbox and the text were visible above the div that handles the state change.
EDIT:
Here is a version using a pseudo-element built off of the span holding the label text if you don't want the empty div
in your code:
<label
htmlFor="choose-me"
class=
'flex w-fit items-center justify-evely text-grey-8 relative'
>
<input type="checkbox" id="choose-me" class="peer mr-3 absolute left-2.5 z-20" />
<span class="relative z-10 inset-0 py-3 pr-3 pl-8 before:-z-10 before:content-[''] before:absolute before:inset-0 before:h-full before:w-full before:border-2 before:border-grey-4 peer-checked:before:bg-indigo-200 peer-checked:before:text-indigo-800 peer-checked:before:border-indigo-800 peer-checked:before:block">Check me</span>
</label>