I have a similar problem.  Setting the CapsLock option to "Caps lock
toggles shift so all keys are affected" (the "shift cancels caps lock"
option disappeared in gnome about a year ago), I get the desired effect
(shift does cancel caps lock), but the keyboard caps lock light no
longer functions.

Worth a separate bug report?

Using a newly installed 8.10.

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"Shift cancels CapsLock" -> confused LED state
https://bugs.launchpad.net/bugs/248371
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