What does this mean?

“enclose in a capsule”

Does this mean a lid?

This sentence mean something has enclose in a capsule. Enclose --> means you envelop or protect something. Capsule is a kind of a pack, a sack, or a bag of some insects like pupa, larvae of the butterfly or bee; it often is a shell which is very soft and made by saliva or mucus of insects.

The correct sentence should be like this: “enclosed in a capsule”

In pharmacology, this sentence mean some kind of pill enclosed in a capsule or “capsules”.

Kim Sa