MP26101 charge current

Does the charge current resistor set the average charging current of the battery, or the peak inductor current?

Average, if you look at the block diagram the amplifier GMI is a GM amp that compares the amplified voltage signal from the current sense resistor to 1.23V. Voltage to low and the CompI cap is charged up, voltage too high and the CompI cap is discharged, so an averaging by the compI cap. Assuming the battery voltage isn’t too high, the CompI cap voltage will set the peak inductor current so that the average value satisfies the A1 error amp.

Once the battery voltage hits the float voltage then the amplifier GMV starts to out-assert the GMI amp and lower the peak inductor current to maintain the battery voltage at the float voltage ( and no higher)