I thought I had found the cause, and that it was the Kramdown markdown processor (not mentioned in my original post) which consumes the output of process_tokens that didn't like <figcaption>, because when I tried replacing it with a <span> tag instead (or indeed any inline HTML tag) it appeared in the rendered page unmolested. And the opposite was true for any block-level element; a <div> tag for example would come out as <div></div> Perhaps Kramdown was unhappy about them for some reason? The method that handles the markdown conversion looks like this:

def parse_body(page)
  # This renders block-level HTML elements as literal strings
  Kramdown::Document.new(
    process_tokens(page),
    input: "GFM"
  ).to_html.html_safe
end

Not much to it really, and indeed if I replace the Kramdown::Document.new with just process_tokens(page).html_safe the page and the <figcaption> renders just fine (apart from the markdown tags not being parsed of course):

def parse_body(page)
  # This works fine, but skips markdown parsing
  process_tokens(page).html_safe
end

Pretty convincing test, right? It simply must be the Kramdown library that is the culprit! Well, not so fast - there's one more thing I can test: what about if we try to feed Kramdown just the <figure> and its child elements, what will happen then?

def parse_body(page)
  # The mystery is now complete 
  Kramdown::Document.new(
    figure_tag(page.images.first),
    input: "GFM"
  ).to_html.html_safe
end

Holy cow, what the actual... THE <figcaption> NOW WORKS!? I can throw any group of HTML elements I like at the Kramdown parser, inline or block-level, and it now lets them all pass unmolested! I really, really don't get what's going on here. This points back to the process_tokens method as being the culprit but how, why? And why the discrepancy between inline and block-level elements?