Explanation for Mundell-Tobin Effect
Robert Mundell originally wrote about Mundell-Tobin effect in response to the Fisher effect, which states that "the real interest rate is unaffected by monetary policy and hence unaffected by the expected inflation rate." In other words, nominal interest rates will always adjust such that real interest rates stay at whatever the market rate is. Hence, if inflation rises, then nominal interest rates must rise. Which brings us to the first point of confusion...


  Mundell-Tobin effect supposed to result in 'higher' nominal interest rates


This is the Fisher effect not Mundell-Tobin. Note the Mundell-Tobin effect explains why nominal interest rates will not rise as high as expected by the Fisher effect - it will be less than one-to-one. This is not a contradiction as much as a competing factor.


  I believe that an increase in the demand for real capital means the same thing as the increase in the demand for loanable funds


The reduced demand for money increases the supply of loanable funds, which induces more demand, which is then used to purchase real capital. This in turn reduces the expected rate of return on this capital. If expected rate of return is not as high on capital, real interest rates do not have to be as high to compete in terms of opportunity cost.