When peer tracking is enabled on a session, the neighbor IP address is tracked in the routing table. If a failure occurs and there is no longer any IP route matching the neighbor address, or else if the longest prefix match (LPM) route is rejected by the configurable peer-tracking-policy, then after a 1-second delay the session is taken down. By default, peer-tracking is disabled on all sessions. The default peer-tracking policy allows any type of route to match the neighbor IP address, except aggregate routes and LDP shortcut routes.
Peer tracking was introduced when BFD was not yet supported for peer failure detection. Now that BFD is available, peer-tracking has less value and is used less often.