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They are capable in the sense that they have been instrumental to Russia's incursions into Eastern Ukraine. Russian-held positions captured by Wagner Group will now be at risk if they have mobilized into Russia. That means the Ukrainian counter-offensive is likely to see more success.How capable is Wagner?
That said, they simply do not have the numbers to go into a full scale war against the Russian MOD. They might however be attempting to force Putin's hand to exit Ukraine. That would be a huge PR blow to Russia's military might.
One thing is for sure though, if they capture Prizoghin it's a wrap. Assuming all the info coming out is true of course.