A hypothetical example for the meaning of incapacity could be if a person becomes a quadriplegic after a car accident, and can no longer work as a construction foreman.
After their physical rehabilitation and training in wheelchair skills, they might gradually return to work in lighter duties, such as a construction estimator. Or they might be able to work in a different field entirely, such as an Agile project management specialist.
By comparison, total and permanent disability insurance claims use a specific definition of capacity and disability, depending on the insurance company. So an example for TPD could be if our construction foreman became blind, and they need good eyesight to do any of the jobs they're educated, trained, or experienced in.