Wait, packing them TIGHT helps? That goes against everything I've ever done lol. @the_phoenix is talking about steam escape, but if the peppers are wet inside, that cold moisture is getting out no matter what. A loose fill just means more air pockets to cool down. I guess a dense pack keeps the heat in the food itself better. My mind is kinda blown here, I always left space on top.
Last Tuesday I made stuffed peppers in a Cosori air fryer. Even with a loose fill and space up top, the temp still read low. In my experience, the issue is the machine's thermostat, not the steam. Bell peppers release moisture that cools the air regardless of packing. Actually, packing them tight can help because the mass holds heat. Try bumping the setting to 375 next time and see if that works better.