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not even the PS1/N64 peaked because people could still find ways to make the games look better etc. / Everygame that runs slow with fps below 30 peaked the cell when the CPU load reached 100% even if its for 1 nanosecond.

So there is no real peaking of this technology at all because you cant specify what peaked is.

Is it A)reaching the limit of the consoles power or B) is it making better stuff untill it doesnt work anymore?

The first is a stupid assumption since a ton of games reached that limit with inefficient coding, the second will not happen because it will always be possible to make the games look better with better devs and better coding (+ you cant run a console on 100% CPU 100% GPU  for 10h+  it will die.)