What the peg represents, and what actually holds it there
An LST's market price is supposed to track the value of the claim it represents, the underlying staked assets plus whatever rewards have accrued. In a well-functioning market, this tracking, often called the peg, holds closely because arbitrageurs can profit from correcting any gap: if the LST trades below the value of its underlying claim, buyers can pick it up cheaply and eventually redeem it for more value than they paid, and if it trades above, holders can sell into that premium. That constant pressure is what keeps the LST's price roughly aligned with its underlying value.
The important detail is that this alignment is maintained by market mechanics and arbitrage incentives, not by a hard guarantee of instant, one-to-one redemption. Redeeming an LST for the actual underlying staked tokens generally still requires going through the network's normal unstaking process, and that process often involves a real delay. Arbitrage only fully closes a price gap when arbitrageurs can act on it quickly and cheaply, if redemption is slow or costly, that corrective pressure weakens exactly when it's needed most.