It gives 8 mg/mL, and whether that is sensible depends on the dose you will draw from it. 20 ÷ 2.5 = 8 mg/mL in bacteriostatic water. A 0.5 mg dose is then 6.3 units on a U-100 barrel and a 1 mg dose is 12.5 units. Both land in a readable part of the barrel, which is the whole point of choosing the volume deliberately.
Start from the dose you intend to draw and work backwards to the volume that puts it in a readable part of the barrel.
Dead-space loss scales with the number of draws, not with the concentration, so a lower concentration spread over more draws loses proportionally less of the total peptide.
Round to a diluent volume you can measure accurately. Measuring 1.00 mL on a 1 mL syringe is reliable; measuring 1.37 mL on anything is not, and the error propagates into every dose.
Published content assay results across the independent testing services show nominal and measured content differing by one to ten per cent, which makes content the dominant term in dose error.
Measure a volume you can actually measure. Round numbers, real syringes.