1 - Heat oven to 300F. Line two baking sheets with parchment paper; set aside.
2 - In mixing bowl, beat butter on medium for 30 seconds. Add granulated sugar, preserves, vanilla, peppercorns, and 1/4 teaspoon salt; beat until well-combined. Beat in as much flour as you can; stir in remaining by hand.
3 - On lightly floured surface roll dough to 1/4-inch thickness. Use a 6 to 7-inch round scallop-edge tart pan to cut rounds, re-rolling and cutting as needed (will have 3 to 4 rounds total). Using two spatulas, transfer 1 or 2 rounds to each prepared baking sheet, spacing 1-inch apart. Using a pizza cutter, randomly cut rounds in wedges; do not separate. Lightly brush with milk; sprinkle with coarse sugar.
4 - Bake 16 to 20 minutes or until centers are set and edges begin to brown. remove baking sheets from oven. Recut wedges; let cool slightly on pan. Transfet to wire racks to cool completely.
5 - Ice cooled shortbread; arrange nonpareils.
ICING: In bowl combine 2 cups powdered sugar, 1 tablespoon milk, and 1/2 teaspoon vanilla. Stir in additional milk for speading consistency.
***The same dough was used to make the shortbread icicles, above, and the diamonds. For the icicles, we used a scallop-edge tart pan to cut circle. A bowl or round canister, 6 to 7 inches in diameter, will work too. For diamond shapes, use the short edge of a rectangular tart pan or a crinkle vegetable cutter to cut free-form diamonds.
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