Well, with peppers, there's natural sugar in them, so if you control the temperature correctly, the seeds and bits will caramelize and become little crunchie bits in the oil. There's no need to strain them out.
You want to keep the oil temperature around 150 C peak, After you see basically very little bubbles coming out, that means the water is mostly gone/done, turn off heat, but keep stirring until the oil temp drops to 120 C. Then cover and let sit for a few hours.
The reason is, the base pot temp is actually still very hot, if you leave the pepper to settle in the oil right after turning off the heat, they will begin to Char/Blacken, turning the oil Bitter.