The argument of the passage, jews and gentiles, who believe in Jesus, are brought into a singular believer. It’s a new identity. We step away from our old identity, and they are no longer a sinner.
I have been identified with Jesus by being crucified with the Messiah, but I am alive w/the power of the Spirit in me.
To Peter, this is the basis for discovering who you really are. I am loved, therefore I am. Not I think therefore I am.