+ 1 Harry
Some cultivars tolerate water stress better than others - but even though water deficiency will have an overall negative effect on both the growth, root system, the number of fruits pr. plant, the lenght, size and weight of the fruit - especially if the deficiency occurs during the vegetative or blooming stage
But so will excessive watering!
I believe the hold back on the water thumb rule is due to the fact, that the plants easily come back green and lively from a dry period where as excessive water can easily kill them - for instance due to root rot or due to lack of oxygen. Also first signs of water defiency - a lack of virosity in the leaves / droopiness are easy to spot - where as to much water often gets spotted to late plus have other negative side effects such as fungus etc.
I also think that others then I are likely to over water (and over fertilize) just becauce we wish all the best for the plants..
For the upper reasons slight under watering is my choice
Regarding water stress and hotter pots studies as far as I know points in different directions - allthough most say ay. Temperature seems to be one of the most important variable in producing the hottest pots.
Some have btw. more than speculated that due to the fact that water stressed plants have smaller fruits proportionally they have more placenta - than large not water stressed fruits. Therefor the capsaicin concentration is higher pr. weight unit.
/Jadia
PS. Not a native English speaker, so if I mess up and something is unclear - do not hesitate to give me a heads up.