What happens when peppering is exfoliated off 5 days post laser Halo treatment?

You haven’t done anything terrible. Once you washed off the lotion it was gone, the burning just took awhile to subside. Regardless, now nurture your skin with gentle cleansing and a mild moisturizer. If cetaphil burns you can use something like Vaseline. Scrubbing off the peppering won’t scar you it just increased inflammation and prolonged your redness. Baby your skin for a week or so. -Chris

It's important to follow your post treatment instructions. The moisturizer you are using is not gentle enough for your skin. You should follow up with your treating physician to make sure you are on the appropriate skin care products. Avoid products with c serums or hyaluronic acid. 

I would get back in to see the doctor who did your treatment.  It's best to let the peppering come off on its own (MENDS) as it is beneath the skin surface.  It's also important to follow the instructions they give you for skin care as you are at risk of hyperpigmentation.  Wear sun protection, stay out of the sun and let the skin heal.  No scrubbing till it's fully healed.  Your skin sounds like it was still unhealed when you put the other product on.