Happy to see someone adding to this thread. I was hoping that when I updated to Sequoia the functionality of my Caps Lock key would be restored. No such luck - it continues to be DOA.
Any suggestions welcome.
After I wrote this, for the first time in Sequoia, I opened terminal and ran this command which was supposed to restore the functionality of the Caps Lock key, i.e. I would be able to tap it, and all my text would be upper case until I tapped it a second time: sudo defaults write /Library/Preferences/FeatureFlags/Domain/UIKit.plist redesigned_text_cursor -dict-add Enabled -bool YES.
This did not work; the caps lock key does not light up or function. Sorry I ever messed with this key.
Yet another edit to this post: I installed Onyx and under Parameters / Misc., I set the [Show Caps Lock Indicator] to ON, restarted my 2020 iMac/Sequoia 15.1...and the Caps Lock still does not work.