I've tested giving Exp candies to my Pokemon with EXP Cap since that mode fit my needs best. I've found that so long as your Pokemon are right under the cap, there's nothing stopping you from shooting pass it at least at earlier levels if the candy is a large enough size. For example, the Exp Candy M gave my level 19 Sandshrew enough Exp to reach Level 21 while the cap was still set to 20. The good news is that it won't eat anymore until the cap is increased again, but that exploit is still there.
I haven't quite figured out if or how I want to distribute these candies yet, but I thought I should share that information.