Ground loop: Yes, the physical presence of a ground loop is undesirable, in theory. But in practice, if it doesn't hum it doesn't matter.
the capacitors are going to the IN of the volume as opposed to the out of the volume pots.What difference would that make? This is the point of this whole thread. More clearly stated, signal comes from the PU. The signal is split in 2 directions: one side goes to the vol pot, the other side to its companion tone pot. (This is not always immediately obvious from the schematic, or the physical layout.) The vol pot can bleed all, or just some, of the signal to ground. The tone pot would like to do the same thing, but the cap prevents this. The cap blocks lo's from bleeding to ground, and only allows treble to bleed to ground. The tone pot controls how much treble can bleed to ground through the cap. This is called a "treble cut", or a "treble bleed" type of tone control.
Now, wiring variations come into play. The designer can choose either lug1 or lug2 of the vol pot as the Input. Per the above posts, this will determine if dual vol pots are fully independent, or interactive. (Either way they are "blendable", which word still leaves me confused.) Whichever vol pot lug is chosen as IN, the signal is split from there to the tone pot.
The tone pot is wired as a variable resistor. Often, lug1 has no connection; or lugs1&2 can be jumpered. Either way works for a variable resistor. Now, more wiring variations come into play. The cap can come before the tone pot's input, or after the tone pot to ground. Either way works just the same. Also, the tone pot's input is usually lug2. But sometimes lug3 is used, in which case lug2 goes to ground.
So, to split the signal from the PU, the input of the vol pot must be connected to the input of the tone pot. This connection can be: i) a wire; or ii) it can be the tone cap. If i) a wire, then the tone cap comes after the tone pot, and completes the ground connection of the tone pot. If ii) a tone cap connects the vol & tone pots, then the ground lug of the tone pot goes directly to ground.