Yah, I'd say capped grading is a bigger issue than the grades themselves.
As for the shelf vs step thing, I went to a school that allowed you to choose before, middle, or after, and I ended up doing it after 1 rotation - IM. It was the best decision I could have made. For one, it really motivated me on shelf studying. For another, I got to take IM right after finishing preclinicals, so it didn't affect me there as much as people think. You need a dedicated period for all of the random minutiae that only show up on Step 1, but honestly for the wards you mostly need OME, which is true both before and after Step anyways.
However, for Step itself? My UW scores went up like 20% before and after my IM rotation, but didn't budge one damn iota during my 2mo of dedicated itself. Now, I was also kind of a crummy student during that time, but no more than most people end up, if they're being honest. I also think I burnt out less both in clinicals and on Step by staggering my clinical time and also my study time (aka not starting dedicated right after finals period in M2, and breaking up my rotations a bit).
Everyone I knew who chose to do a rotation before Step ended up hitting honors threshold on their Shelf except one. It seemed to have no effect on clinical evals. Not sure about those who waited until the end (or at least more than halfway through) yet, since most are still finding out.