capitalism came with machines that mangles children, chemical exposures etc. Things they can't possibly know the consequences of.
Realistically like a kid making a basket or watching sheep is not the same danger level as being pulled into a machine or getting silicosis before they turn 18
Britain passed the Children and Young Persons Act in 1933 source
USA passed the Fair Labor Standards Act in 1938 source
We don't have adolescence coal miners today in the USA as a result:
Certainly not perfect, and even these standards are under attack today in the USA to make them worse.
If you're extending this child labor in other countries then you're opening a whole can of geopolitical problems with notes of imperialism and enforcing one culture's values on another.
Sorry, but things done by governments under the pressure of organised labour—even if those governments happened to be predominantly capitalist—do not qualify as "capitalism fixing that".
I feel like the issue with what you're saying is that it's a bit of a "no true Scotsman," right?
Like, if any time someone points out where a capitalistic group or society did something good, you respond, "well that's not capitalism," then you're just creating a tautological framework.
"All things I don't like are capitalism, and it doesn't matter if those same things happen in non-capitalist systems because in those cases that's actually just capitalism infecting an otherwise good non-capitalist system" is a fairly unexamined stance, right? It might as well be, "capitalism is any bad thing in the world." The word loses meaning at some point.
Things that happen under capitalism aren't necessarily because of capitalism (or any of the other "isms") so it is important to try and determine if these things that happen are a result of the system or despite it (or from some other overlapping system).
No, this isn't really a, "no true Scotsman," situation. The person claimed that Capitalism did reform child labor, but they gave examples of regulation, not Capitalism. An example of Capitalism ending child labor would be something like the free-market ending child labor because it was less profitable, but I can't think of a large-scale example of that.
If they had said, "No capitalist country could end Capitalism," and then when someone brought up the Fair Labor Act and they said, "Well then America isn't a really a Capitalist country," that would be a, "No true Scotsman," situation.