Are you sure you’re turning the correct snap? Each transform has its own transform snap option to toggle. The Scale is the one on the right.
I’ve had problemas with the scale of capsules once when I had to deal with a small capsule, the scale control was just off for some reason, but that’s why I prefer to go into the Details tab and tinker with the Capsule settings.
These settings have sliders so you can change them smoothly.
Hope that helps!