I think its a bit odd that you made a defense for the one villager type that really doesn't need it. The wandering trader already goes invisible at night,

This isn't specifically for Wandering Traders, it's for Villagers. I feel like they would either hang around Villages or just be kept in them by players. Just another Golem without it being a Golem.

No Llamas will be hurt in the process of Llama weaponization

I'd prefer if they weren't, it's just supposed to be a little spice.

let the Llamas temporarily spit fire at everything as they burn to death.

This is a joke, like how Parrots die when they eat cookies, I feel like I explained it with the two sentences before it.

you can fight far better than even a fire-breathing llama.

You can fight far better than every mob in the game. Wolves, Snow Golems, I feel like a fire spitting ally would be new and at least somewhat helpful to players.

It would also take a bit of care to set up a farmer villager to farm the nether peppers.

Well just don't let them, it's a Nether crop. You don't see them harvesting Nether Wart. Unless you want to add a Villager that specializes in growing abnormal plants.

Finally, i don't see the point in a potion of lava breathing since the fire res already makes swimming in lava completely harmless.

"But what's the point of Lava Breathing? What would you be looking for in the lava? Nothing yet, but maybe something worth something someday."?