Place the Peeps and whole milk in a microwave-safe bowl. Microwave in 15–20-second intervals, stirring after each interval, until mostly melted and smooth; do not let the mixture boil.

Let the melted Peeps mixture cool to lukewarm or room temperature. Cooling is essential before it is combined with the whipped cream.

Whip the cold heavy cream with an electric mixer until stiff peaks form. Stop mixing as soon as the cream holds its shape.

In a separate bowl, stir together the sweetened condensed milk, vanilla extract, and cooled Peeps mixture until evenly blended.

Gently fold the whipped cream into the Peeps mixture in two or three additions. Use a light hand and avoid overmixing so the base keeps its volume.

Transfer the mixture to a metal loaf pan or shallow freezer-safe container. Press plastic wrap directly onto the surface, cover the container, and freeze for at least 6 hours.

Let the ice cream stand at room temperature for about 5–10 minutes before scooping. Finish with extra Peeps, pastel sprinkles, or crushed Peeps if desired.