In our reality, Walter lost his original Peter the same way as always - Peter succumbed to that deadly illness as a boy. Water crosses over into the other reality to take alternate Peter back with him - just as in Walter's original history - but this time, Peter dies when the ice cracks on the lake as the two are crossing.
So now we know the moment that our original and original alternate realities diverged from the new dual realities with no Peter that we've been seeing this season. (See, I told you this was more important and interesting than the fungus.) Knowing this moment allows us to fine tune the question of what happened to alt-Peter-the-boy when he "drowned" in lake.
I'd bet he didn't drown, but was whisked away by the Eternal Bald Observers who are keeping him in some meta or third universe now - the universe from which the ETOs derive. Maybe Peter's not being kept there, but is playing some kind of more active role. We do know that Walter and Olivia have been seeing him in reflective surfaces (Walter) and dreams (Olivia).
Walter's situation was especially poignant tonight, as he tries to resist the notion that his seeing and hearing Peter - whom Walter doesn't quite yet know is Peter - means Walter is losing his mind. Dr. Sumner's back with his doubting of Walter's sanity - in our world with Peter, Sumner opposed Peter's attempts to get Walter released from Sumner's German psych hospital - and in the current world without Peter, Walter is more vulnerable to Sumner's pressure.
Which brings home a point we saw many times, and in fact got so used to that we took it for granted, in the Fringe of the first three seasons: Peter was Walter's protector and champion, and gradually helped Walter regain many facets of his sanity. Now Walter will have to rely on Olivia - who's dreams of Peter, told to Walter, confirm his sanity, for now - and whatever inner strength he can muster. Powerful stories lurk ahead in Walter's dual quest for his son and his sanity.
... Fringe 4.2: Better and Worse Selves