After four episodes sans Peter, "Novation" is a pretty low-key episode considering the circumstances. Peter is off to the side for majority of the episode, interrogated a couple times but in his cell the entire time. The characters' response to him is actually realistic; they have no clue who he is, but he's not an imminent threat, so they don't make a big deal out of him. It's also good that Peter is a smart guy and figures the situation out almost instantly, and does cause a big raucous trying to convince everyone they know him.
The problem with the episode, though, is that the new shape-shifters don't really make good enemies. I like that Peter helped on the case, but the conclusion of the episode is rather tepid: now they can't know who's a shape-shifter unless they perform surgery on them. I'm sure they'll come up with a solution sooner or later. The larger problem is that they're part of the larger mythology of the show--something that's always been nebulous at best, changing at the writers' whims. It's pretty obvious the writers make stuff up as they go--evidenced by the random forays into the pattern, the Bible, etc--so it's hard to gauge anything about the plot.