Do they really intend their arrest operations to overrun the capacity to deport people by this much?

Yes.

Mostly, that's because the capacity to deport people is rather limited. There simply aren't enough immigration law judges. That's one of the reason that the hearing calendar got so backlogged, and why there are literally several millions of cases in the pipeline. There are actually fewer ILJ's today than when Trump took office, because a bunch of them were let go in 2025.

This is a problem for interior enforcement, because nearly all people who are detained for immigration violations away from the border are entitled to a hearing before deportation. Any many of the folks detained on the border that claimed asylum were entitled to one as well. Since you have millions of people who are entitled to a hearing, and nowhere to store them while they're waiting the several years for a hearing, you have to release most of them on their own recognizance until the hearing date. Similar to being out on bail awaiting your trial, and what conservatives derided as "catch and release."

So, you can go out and arrest as many people as you can - but if you don't have any more beds at your detention facilities, and if you don't have any way to speed up the deportation hearings, you just have to release them to await their hearing dates. In order to get more people through the process, you can't just increase the number of people you arrest - you need to build more detention facilities and hire more ILJ's. Which takes money. ICE didn't get that money until middle of last year, so they're finally able to start getting some more detention facilities in place. They tried using state facilities as a temporary kludge ("Alligator Alcatraz," anyone?) but the logistics of doing that drive up the expenses.