Adjust oven rack to middle position and preheat. Use 350°F if baking in glass or a dark pan; set to 375°F for a light-colored metal pan. Line a 13x9-inch baking pan with parchment, leaving a 1-inch overhang to lift bars out later.
In a large bowl whisk together the flour, 1 cup granulated sugar, baking powder, salt, and 1/4 teaspoon cinnamon until evenly combined.
Cut the cold cubed butter into the dry mixture with a pastry cutter or two forks until the texture is a mix of coarse crumbs and pea-size pieces. (Alternatively, pulse the dry ingredients and butter in a food processor in short bursts.)
Pour the lightly beaten egg into the crumb mixture and stir just until the dough begins to hold together in loose clumps. Reserve about half of the crumb mixture (by volume) for the topping; press the remaining mixture evenly into the prepared pan to form the base.
Place the pan in the freezer for 10 minutes to firm the crust, then return to the oven and par-bake the crust for 8–10 minutes (until it just begins to set but not brown). This helps keep the base from getting soggy.
While the crust chills, combine 2/3 cup sugar, 1 tablespoon cornstarch and 1/4 teaspoon cinnamon in a large bowl. Add the diced peaches, lemon juice and lemon zest and toss gently until the fruit is well coated. Let the mixture sit 8–10 minutes to macerate and thicken slightly.
Spread the peach filling evenly over the warm par-baked crust. Use your hands to squeeze handfuls of the reserved crumb mixture into clumps and scatter over the peaches so some fruit remains visible.
Bake until the topping is golden and the filling is bubbling around the edges — about 40–45 minutes for a light metal pan at 375°F, or 50–55 minutes for glass/dark pans at 350°F. If the topping browns too quickly, tent loosely with foil for the last 10 minutes.
Remove from oven and let cool on a wire rack until almost room temperature, then refrigerate the pan for at least 45 minutes to an hour to firm completely for cleaner slices.
Whisk together the powdered sugar, vanilla and 1 tablespoon milk (add a little more milk if needed) until smooth and pourable. Lift the chilled slab from the pan using the parchment overhang, place on a cutting board, cut into bars, and drizzle with the glaze just before serving.