The reward cap is the limit on the amount of KAE any one debt can earn.
The cap is 10,000 KAE (@ $1/KAE), if you're staking, or 7,500 KAE (also @ $1/KAE) if you're not. At, for example, $25/KAE, these reduce to 400 KAE and 300 KAE respectively.
The cap is updated periodically as the market value of KAE changes to keep the value of the reward consistent.