Other posters have explained well but to add from my simplistic/layperson viewpoint - yes every decision is an individual decision, but particularly relevant decisions for elderly frail people, where in practice the people who hold POA for the person and/or health and social care professionals tend to feel it might be necessary for them to intervene if the person has lost capacity (as opposed to allowing a capacious person to make their own unwise decisions) is whether they should continue living at home in their own home (supported by carers and equipment etc as necessary) or should move to residential care. It's also common in deciding whether/to what extent external help should be accepted/imposed on the person, but you say that isn't an issue for your brother, or for financial/property type decisions but that doesn't sound super relevant here.
The role of the OT in this scenario is largely around risk assessing for things like falls or how other injuries/issues might arise for someone in your brother's position living at home, and seeing what equipment or other aids and assistance can help him to remain living safely at home. I would expect the reason capacity is being discussed by your SIL in the context of the OT is not that there's a suggestion necessarily that they or the carers would physically intervene to force the use of the equipment, because your brother lacks capacity to decide whether to use or not use something, but more so that the OT's professional opinion and insight is relevant to the broader question of (a) whether or not your brother can live at home safely at all and (b) if your brother thinks he can live at home safely against professional advice, or would refuse alternative options I.e. hospital admission or residential care, is that simply an unwise decision that has to be respected and given his autonomy as someone with capacity or is that actually not something he has the capacity to decide, and therefore you and she as attorneys are responsible for now.
An example of how that conversation might go, an elderly person with a history of falls refuses to use a walker in the house. The OT would discuss with them why that is and explore options. If the elderly person demonstrates an understanding of their illnesses, can relate the history of the falls, understands that if they don't use the walker they are at high risk of further falls and the consequences of that i.e. serious injury, death, and still says they don't want to use it, or will choose to use it when they want to, or will use an alternative, less good aid instead, that might point in the direction of capacity - whereas if they don't seem to understand or deny they have any illnesses, can't point to the risks or acknowledge the consequences of not using the walker or suggest magical or delusional thinking, then that would suggest lack of capacity. Highly unlikely someone would be taken into residential care on the single assessment of an OT alone against their wishes, but as your SIL has suggested the opinion of the OT will be informative and relevant.
Not saying your SIL necessarily is planning or thinking your brother necessarily has already lost capacity on these key issues, or that residential care is imminently needed, but I'm guessing she's anxious as he's clearly frail and at high risk, perhaps there's a suggestion of somewhat unhelpful influence from the partner (interesting that s/he not an attorney?) and she probably wants to understand how close you are to needing to take over this kind of decision making for him and ideally to have professional endorsement/diagnosis around this rather than guessing and risk either overstepping or under stepping, if that makes sense. It's often only when there's a crisis that this sort of thing becomes abundantly clear but of course you'd like to avoid the crisis if possible while giving your brother maximum independence as well...