I do not think this is a problem or bug with TOAD, but I wanted to post it here for comment.
Please take a look at the following screencap:
In that dialog, I had just typed the 'x' chars in the User field and tabbed to the password field when the "Caps Lock is On" message appeared. Now, what is out of sync there is not the warning message but the lower-case letters in the User field. Caps lock was indeed on, but the 'xxxx' string was entered as lower-case. I confirmed caps lock was on by switching to a different app and typing, and it was in upper-case.
Note: The caps-lock indicator on my keyboard was also out of sync at the time too, but when I began typing in the other app, it "caught up".
This all happened in a Windows VDI that is remote from my normal desktop environment. In the VDI, caps-lock was on, and when I typed in an app other than TOAD, it came in as upper-case. Also, my keyboard was out of sync with the VDI caps-lock state, but the VDI itself "pushed" the state down and lit up the KB.
The weird part is that while TOAD identified the correct VDI caps-lock state when the Password field was selected, chars typed in the other text fields went in as lower-case.
Cheers,
Russ