Mandatory co-author?

It's common in academic circles for additional people to be listed as authors as a "courtesy" (a mandatory "courtesy"); e.g., the big-name director of a research lab automatically gets listed as author, often as first author, of any publications arising from research done by the team in the lab, even if that individual had no direct role or participation in that particular research study, because it was done by "her/his" team in her/his lab. There's a lot of academic etiquette and tradition involved in who gets listed as authors, and in what order, on academic publications. In this case, the capstone mentor played a significant role in the development and outcome of the capstone project; in academia, people routinely get listed as co-authors for a lot less. :)

I don't think of it as "just a courtesy." I think of it as totally appropriate. Presumably, your main adviser gave you advice on the project. In essence, your project "came out of his/her lab." The time and attention she gave you was time and attention that was made unavailable for her own research. Publications are the currency of academia. Advising students is a form of academic work. Giving your adviser the proper credit for the work they helped you to produce is appropriate. That is why it is a common rule in many, many programs.

Funny how outside of academia this is called simply "editing" and you dont get co-author credit for helping an author edit their work. You get a thank you in the acknowledgements.

But when in Rome....

Thesis, capstone, and dissertation readers do a lot more than just "edit" the final document. They are directly involved in every aspect of the project from its inception, and guide and teach the student through the entire process.

Thank you, that makes more sense. What was stated previously just sounded like editing work.

Although why the head of a lab should get author credit simply for running a school's lab, if they aren't providing real substantive input, still makes no sense.

We're not talking about people who are "simply ... running a school's lab," we're talking about senior researchers, academics who are well-known in their fields and have significant bodies of research, who are heads of major research programs. They have other professionals and students working under them in their primary research program. They mentor and lead those other researchers and research assistants, and they bring in the research funding that makes the program possible. It's common for the "underling" researchers to do smaller, individual research projects "on the side," often with data collected as part of the primary research project, and write up and publish those smaller projects. When that occurs, the primary researcher typically gets listed as a co-author, because s/he a) provided the funding that paid for the research being published, b) is doing the primary, "big," research the smaller project was "spun off" of, c) provided the researchers with the opportunity to be doing the research in the first place, and d) mentors and guides the researchers publishing the smaller project day in and day out over time. Do you have any experience with research universities? All of this is common.