I've been on metformin for decades; no peripheral neuropathy. Diabetes itself IS a major cause of peripheral neuropathy, this is well established. Alpha-lipoic acid (or even better, R-lipoic acid, the active of the two isomers) has long been used, successfully in my case and many others, to prevent or lessen that symptom. From https://www.ncbi.nlm.nih.gov/labs/pmc/articles/PMC6723188/. :

α-lipoic acid (ALA, thioctic acid) is an organosulfur component produced from plants, animals, and humans. It has various properties, among them great antioxidant potential and is widely used as a racemic drug for diabetic polyneuropathy-associated pain and paresthesia.

You seem to be on to something about the B12 issue; those using Metformin should probably supplement with B12. Here's the Abstract from https://pubmed.ncbi.nlm.nih.gov/20134380/ :

Chronic metformin use results in vitamin B12 deficiency in 30% of patients. Exhaustion of vitamin B12 stores usually occurs after twelve to fifteen years of absolute vitamin B12 deficiency. Metformin has been available in the United States for approximately fifteen years. Vitamin B12 deficiency, which may present without anemia and as a peripheral neuropathy, is often misdiagnosed as diabetic neuropathy, although the clinical findings are usually different. Failure to diagnose the cause of the neuropathy will result in progression of central and/or peripheral neuronal damage which can be arrested but not reversed with vitamin B12 replacement. To my knowledge, this is the first report of metformin-induced vitamin B12 deficiency causing neuropathy.