The Kapsul does turn on and off. There is only one way to keep the Kapsul on all the time and that is by dropping it to the snowflake symbol (64 degrees). When that happens it blows the coldest air it's got with its highest fan speeds. If it hits 64 degrees it keeps going unless it hits 60 (which is pretty unlikely in hot weather).
Otherwise, the Kapsul tries to reach the user's temperature set point (let's say it's like 70 degrees for the sake of this scenario) and blows cold air and runs the fans in the way that it thinks is best to get the user comfortably to 70 degrees. The Kapsul is trying to manage humidity, temperature, energy use, and comfort by turning fans on and off, ramping them up and down to be quieter, and running them at a lower speed so that they are less loud. That results in the Kapsul "turning on and off.
This is an intentional feature behind our A/C.