How do you paint wood windows (inside) when they are peeling?

No, justchip off as much as possible and sand the edhges,smooth. Make sure it is clean. Prime with oil based primer, lightly sand again, paint with oil based paint, 2 coats.

You will need to sand it down as smooth as possible. As far as the mold I know there are steps you need to take to fix it before you paint over it. I would consult a paint store

Vinegar will take care of the mold.

https://restorationmasterfinder.com/restoration/what-kills-mold-bleach-vs-vinegar/

I think the best thing would be is..that the enquirer goes to a professional paint store and take a photograph of the offending mould on the timber.Better still - if you could take a small sample of the wood with the insitu mould. There are paints that are mould resistant. I would have to wonder where the mould is coming from, and that might be the first step, rather trying to paint over a problem. Fix the problem, if u can, and then paint. I recently had my bathroom ceiling painted with a mould resistant paint - smelled terrible, for a day or so. But it was worth the 'smell'. Best find out the source of the mould and where it is coming from. Best luck. Gabrielle