Project > Project Settings > Scratch Disks > Captured Video

When using video from tapeless cameras, would "captured video" include just any video that is "imported" into the project?

My idea of captured video involves tapes, but how does Premiere look at this?

I'm guessing this is only for setting the default directory for actual captured tapes, as you manually tell simple imported files where to go and you don't use the capture window or capture function at all.

Exactly.
It has to do with the PPro "Capture Module" which only relates to firewire capture of taped material.
It has no relevance at all to tapeless workflow.