Induced demand [0], if that’s the phenomenon you have in mind, does not mean that “increasing highway capacity increases congestion.” It just means that adding capacity increases usage of the road, often to the point that so many more drivers show up to use the expanded roadway that the improvements do nothing to reduce traffic delays.

There is no economic mystery in induced demand: it’s Economics 101 once you realize that drivers pay for their usage of roads in time, not money. So when a roadway is expanded, all else equal, the cost of driving on it falls—you’re no longer stuck in traffic; but the lower price (that is, travel time) increases demand for use of the road, just as low prices tend to increase demand in other markets. The result is that many more drivers use the expanded roadway, to the point that they bid the price, paid in time waiting in traffic, back up to previous equilibrium level.

(That said, there are ways in which building more roadways can increase congestion itself. Since land use is closely tied to access, building new highways can spur development in far-off areas, causing people to drive more than they otherwise would. There’s also a theoretical possibility that adding new roads can change the roadway topology in ways that cause people to change their routes in ways that create congestion.)

0. https://en.wikipedia.org/wiki/Induced_demand

And it's this effect that prompts my strong support for tolling all roads. It's better for everyone to pay for scarce resources in money, not the awkward currency of time.

That tends to be more equitable if the money's evenly distributed.

Or if the tolls are indexed to wealth and/or income.