I had that mothball smell happen in Red Bell peppers from several sources and experimented until learning what the deal is. The mothball smell develops mostly in red sweet peppers which have been refrigerated or kept cold (in bags) for too long; it’s not pesticides. I took red bells that smelled terribly of mothballs and put them on a table, in a perforated bag (to air). After 4-5 days, the smell was gone. When these peppers were bought, they did not smell bad, but after a week or so in the cold, they changed. In cold transport, they may pick up the off taste. I bought the exact variety from the same source a week later, kept them warm and no problem. Keep peppers in a paper bag; put that in a plastic bag (so they don’t dry up) and make a couple quarter sized holes in the plastic bag, so they don’t sweat too much. The idea is to keep them warm, a bit humid, with some air.
It’s possible that truck shipments in cold areas could start the funky smell process. Also, some varieties may get that smell while others do not; peppers have a lot of different flavor components.
