In fact you have to use more lean angle without hanging off the bike with a knee down. The whole reason Kenny Roberts hung off the bike using his knee as a reference point was so that he could turn faster without exceeding the angle of the tires at that time.
Also, as mentioned, it looks like an uphill off-camber turn.
I've had the pegs down on the FZ09 at my track day at Road Atlanta back in November. Taking the peg feelers off will certainly help and you still have some tire edge to utilize. Also, when I put the new Penske shock on the bike, I raised the ride height on the rear about 4mm and then when I did the front forks, I dropped them just slightly when they went back into the triple clamps. The net effect is close to the same bike geometry (trail and rake), but a few millimeters more ground clearance. This setup should result in not dragging the pegs anymore (feelers gone), a stiffer suspension to keep the bike from diving/squating, and a bit more ground clearance. YMMV
Of course, another way to reduce your lean angle and get the same turning radius/speed around a given corner is to lean off the bike to the inside and keep more meat of the tire down instead of the edge of the tire.