When I deselect fix capitalization of sentences under corrections nothing changes. It still capitalizes as before including the first letter of each new line which is what I want to avoid.
Also, Scrivener has crashed a few times when I have selected or deselected options from the corrections menu. It doesn’t happen consistently with any particular option. I have looked for a crash report but I can’t find one.
I was also unable to stop auto-capitalization in TextEdit, though I couldn’t find a specific option for this. I have been able to do so in Pages though.
The fact that you are getting it in TextEdit suggests to me that MacOS is doing it and probably has setting somewhere for this. Check Apple > Sys Prefs for textual autocorrect settings. (Not at my Mac, so can’t help more just now.)
Go to Preferences → Corrections and click the System Text Preferences button at the bottom of the window. Make sure “Capitalize words automatically” is unchecked there, as well as in the Scrivener Corrections menu. That should fix it.
After making changes, you may want to close Scrivener, restart your computer, and then re-launch for good measure.
Also, if you have Grammarly or something similar installed, you’ll need to check those settings, as they override many of the internal spellcheck and correction functions.