Maybe you're thinking too complicated? "Required Capital" is just max margin plus max drawdown. A drawdown happens when you lose trades and your equity goes down. How much it goes down depends on the volume of those trades. If your trade volume is higher, you get a bigger drawdown.

So even if you started with only $100 capital, you can get many thousand dollars drawdown after some years when the profit grew on your account and you've increased your trade volume accordingly.

With the square root rule and OptimalF factors you normally won't get negative equity in the simulation period anyway - regardless of your drawdown size.