Cooling capacity is the output of a refrigeration system, as opposed to the electricity it consumes. A system with 500 W of cooling capacity can remove 500 joules of heat every second from the cabinet, including heat from warm food, door openings, the walls, fans and lights.
Capacity is not a fixed number. It falls as the evaporating temperature drops, so the same compressor delivers much less at freezer temperatures than at chiller temperatures. It also falls as the condensing temperature rises, which happens in a hot kitchen or when the condenser is dirty. Datasheets therefore quote capacity at standard conditions, and engineers adjust for the real site.
In practice, a well-sized cabinet has enough capacity to handle its heat load at the hottest expected ambient with time to spare for defrost and recovery. A cabinet that copes in December but cannot hold temperature in May was sized too close to the limit or is installed somewhere hotter than it was designed for.