Verb, Noun, circa 80's. In use around Northern CA throughout the decade. Original slang by Bay Area Gen X-ers until Zoomers started recycling the word ..nuch like the "new" Running Man dance 5 years ago dance (also from the 80's.) Predates the rise of "Yo Mama" jokes.
To make fun of in a humorous or witty way, either playfully or scornfully. Often done in a group, to witness and challenge the recipient to come back with a better cap.
"Quit capping on him about getting his clothes at K-Mart."
"Man...your caps are hella generic."