Some people including me had this doubt that why do we do a capacity estimation in a design interview when the numbers we finally get are not actually used in the design itself. So, here I try to give you context on what I have realized rearding that.
System design interviews try to simulate an environment in which you would be designing systems together for the organisation. While you are doing this practice it is quite inside an organisation it is crucial to understand what kind of loads are expected to handle so that you accordingly decide on the framework, the technology, the size, type and number of machines you would require. Hence capacity estimation becomes a crucial part of your design.
How does this exercise help you interviewer in an interview?
I would totally understand why would capacity estimation not make sense to you as in an interview you are never really asked design for small scale everything is Highly Available, Strongly Consistent and Huge scale (Somehow breaking the CAP theorem)
Capacity estimation here helps you achieve a few things:
Please fell free to add to this things I might have missed. Hope this helps.