As in Super Mario Odyssey, you can capture enemies (and some other objects!) by tossing the cap at them using the Ring Toss key. (If you don't use a mouse or are playing as a character who also utilizes Ring Toss in their moveset, you can remap this command to one of several other buttons.) However, there are a couple of other perks that make tossing Cappy around extremely fun!
Tossing Cappy at rings will pick them up for you. This can be handy especially if you've just been hurt and need to pick up your lost rings quickly! Cappy also breaks any monitors that he comes into contact with.
With good timing and placement, you can bounce on top of Cappy! It's not particularly useful since the Triple Jump far outshines it in terms of both performance and ease of use, but it was a much-requested feature, and it's pretty heckin fun. If you're falling, you'll also regain the ability to destroy enemies out of the bounce. (I may increase the bounce height in the future to make it more useful.)
I've given many skin colors a default Cappy color to go with them, but if you don't like it you can change its color using the console!
There'll be certain times in the mod where capturing enemies will be necessary for collecting Power Moons or defeating bosses. Keep your eyes open during the levels and think about how you can use an object's skills to your advantage!