Is the M1KP2 the last device on the home run? If so then the black shorting cap should be across the two PINs JP1 “Term” NOT the white header pin labeled D0 D1. If you do not have a black shoring cap you can remove the JP2 X10 1-Way/2-Way jumper from the main board in the upper right hand corner to the left of the RS232 Serial Port and use it on the back of the keypad.

Yes not properly terminating the RS485 Data Bus could result in communication issues including Expansion Module Trouble.