Why does capacitor never fully discharge in this circuit?
There is some leakage from the channel of the FET to the gate:



There might be additional leakage across the PCB itself, especially if you used a no-clean process, or left some flux residue on the board after hand soldering.

With 100 nA leakage, through a 10 megohm drain resistor, there could be up to 1 V on the gate. This is more than the 0.8 V minimum for the gate threshold voltage, so it's not surprising the FET channel remains at least somewhat conductive.