Heat oven to 300 degrees F. Line two baking sheets with parchment paper; set aside.
In mixing bowl beat butter on medium speed for 30 seconds. Add granulated sugar, preserves, vanilla, peppercorns, and 1/4 tsp. salt; beat until well-combined. Beat in as much flour as you can; stir in remaining by hand.
On lightly floured surface roll dough to 1/4-inch thickness. Use 6-to 7-inch round scallop-edge tart pan to cut rounds, re-rolling and cutting as needed (will have 3 to 4 rounds total). Using two spatulas, transfer 1 or 2 rounds to each prepared baking sheet, spacing 1 inch apart. Using a pizza cutter, randomly cut rounds in wedges; do not separate. Lightly brush with milk; sprinkle with coarse sugar.
Bake 16 to 20 minutes or until center are set and edges begin to brown. Remove baking sheets from oven. Recut wedges; let cool slightly on pan. Transfer to wire racks to cool completely.
Ice cooled shortbread; arrange nonpareils. Makes about 3 dozen wedges.
In bowl combine powdered sugar, milk, and vanilla. Stir in additional milk for spreading consistency.