It may be related to the fonts path, which is specified under addon_captcha_options.php -> $fontsPath. Try to set full server path to the fonts folder there.
As it is mentioned in add-on's README,
- $fontsPath - in some cases, it's possible to set relative path to the fonts directory (f.e., './fonts/'). However, in most cases, it's better to provide FULL SERVER PATH (like '/home/local/www/forums/fonts/' etc.) to the fonts directory, else this could be the reason of Captcha not working. Be sure this value contains a SLASH at the end! This script, when placed into forums directory, displays absolute server path: