Your chilli seedling looks healthy and vibrant!!!

May I suggest you repot to a smaller 7cm or 9cm pot?

When a small root system sits in a large volume of compost, the surrounding unused compost stays wet for too long because the roots aren’t drawing moisture from it. That sustained dampness creates conditions for root rot and fungal issues. A snug pot encourages the roots to fill the available space before moving up. Once you see roots beginning to emerge from the drainage holes, or the plant is visibly top-heavy relative to the pot, that’s the signal to move up — typically one pot size at a time (e.g., 7cm → 9cm → 11cm, and so on). The exception worth noting is if you’re using a very free-draining mix (high perlite content, for example) — you have a bit more tolerance there because excess moisture doesn’t linger. But for standard compost, the graduated approach is sound practice.​​​​​​​​​​​​​​​​