What fermentation actually does
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Fermenting the mash is the oldest way to make hot sauce and the one that most changes the flavor. It is also a live process with its own failure modes.
It is a salt brine, not a starter
Crushed peppers with salt, kept under the brine and away from air. Salt at a few percent of the weight suppresses what you do not want while letting lactic acid bacteria, already present on the fruit, take over.
No culture is needed and none is usually added. The organisms arrive on the peppers, which is also why washing hard and then fermenting sometimes stalls.
What it changes
Acidity rises as lactic acid is produced, and the pH falls on its own. Flavor moves from raw and grassy toward rounded, savory and slightly sour. That change is the point; it is not obtainable by adding vinegar to a fresh mash.
Heat does not change much. Capsaicin is not consumed by fermentation.
Time, and when to stop
Days for a light sourness, weeks to months for depth. Warmer is faster and rougher; cooler is slower and cleaner. There is no correct duration, only the point where it tastes the way you want.
Track pH as it goes rather than only at the end. A ferment that stalls high is the one to catch early, and a falling pH is the evidence the ferment is working.
Where it goes wrong
Anything above the brine grows mold. Keep the mash submerged with a weight and a lid that lets gas out, and skim any surface yeast promptly. Fuzzy growth is different from the white film of kahm yeast, and the difference is worth learning before you need it.
The regulatory point, and it matters: a fermented sauce that reaches its acidity biologically may sit differently from one acidified with vinegar, and the distinction affects which rules apply. That is a question for your process authority about your specific process, not one to settle from a general description.