Please re-test with a shorter path and see if that your issue. The size of the command line string you can pass between apps is limited (somewhere around 100 characters in some versions of Windows).
Keep in mind that CAPITAL has to pass other information on the command line between apps, such as the user's password and which company is open, so if you start combining that information together with your /config string, its may exceed a Window's limitation.
There is a new feature in CAPITAL 7.4 that may help with issues of this type. As per the product documentation:
This switch setting is similar to /CONFIG= except that it reads the contents of a system environment variable instead of a specific file name.
For example:/CONFIG=$CLIENTNAME$Will cause the system to read the environment variable CLIENTNAME and use this variable as the filename of the configuration .INI file to access. If CLIENTNAME contained "Smith.John" then the .INI file Smith.John.Ini would be used. The .INI file is always assumed to exist in the same folder that launched the CAPWIN.EXE program. If the specified .INI file does not exist, CAPITAL will automatically locate the file CAPWIN.INI found in the Windows folder, copy the contents of this file, and place it in the same folder as the one where CAPWIN.EXE was found. The new .INI file is also renamed from CAPWIN.INI to the name specified by the $xxx$ variable.