We are currently updating an existing MDM configuration profile using the InstallProfile command in order to modify its capabilities.
Is re-installing the MDM profile via the InstallProfile command the only supported approach for updating its capabilities?
Also, are there any ways to update the MDM profile without requiring re-enrollment?
Please see the description of ServerCapabilities in https://developer.apple.com/documentation/devicemanagement/mdm.
The only restriction on adding/removing items there is on the com.apple.mdm.per-user-connections capability. The others can be added/removed during a profile update.
Other keys also include "Notes" that describe when they can be changed in a profile update.