Can someone please explain what is the best practice firewall setting for a wireguard peer?
I intend to add peers from 3 other different locations (and do the same for them as well, everyone has a public IPv4 address and an openwrt router as gateway), making a huge intranet for my larger family who lives at different places.
The recommendations given are based on the relative security of the peer you'll be connecting to. For a site to site VPN between trusted LANs, which seems to be what you're suggesting you'll be doing, then you can add the interface to the LAN zone.
If on the other hand you were connecting to a commercial endpoint to route your own internet traffic then you should use the WAN zone so traffic passes through the firewall like any other internet sourced traffic.