Peer to Peer operates by calculating the delay between egress of the upstream node to the ingress of the downstream node (i.e. the delay down the wire) rather than the whole network at once. As sync, announce and follow-up messages are sent down the network, residence delay is accounted for in each node through the correction field, and downstream devices compensate for the delay down the wire. The difference is with the requests and response messages, which are only sent between two connected devices and are not used for calculating the delay past those devices.
Why use Peer to Peer?
Peer to peer is more efficient and is less affected by asymmetry within the network. When multiple slaves are present in a network, peer delay packets are only sent to the nearest node, not all the way upstream to the master. Lastly, if the network is to suddenly change due to a fault or similar, recovery time is reduced as not all delay calculations will be affected.