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How is "capacity" used in the availability calendar?
When you set your average sustainable capacity in words per day (WPD), your availability calendar will also automatically display approximately how many words you can process on any particular day.
When estimating your productivity using WPD, assume that you won't be using a Translation Memory. Your "burst" rate WPD should be an estimate of a one-day maximum for projects with tight deadlines when you have 100% availability.
If you prefer not to express your productivity for others, consider entering rates for your own purposes and leaving them visible only to yourself. Future features (planning, etc.) may allow you to make use of these.