When soldiers physically larger than Peewee insults him, he responds in fear with a brash humor.
Peewee learnt how to respond like that because he was a young boy who grew up from Chicago ghettos. His response can disarm or anger anyone.
The day Richie met Peewee, he discovered first Peewee seems arrogant, flippant, and even slightly insane. A closer discussion with Peewee, Richie discovers that he was a caring and loving person.