I was wrong about that, looks like drag being mostly ignored on a capsule re-entry that I can tell. (Just a pod and a parachute, no heat shield or other things on it) The lift changes still work, you can still kinda fly the pod a bit, affecting the orbit while in atmosphere, but not slowing down. Tried lots of different methods of slowing down, but even deep in the atmosphere it would accelerate like the atmosphere wasn't there if you were moving in the downwards direction. A short hop leaning way over so that you stay in the atmosphere keeps accelerating all the way to the ground. If I strap airbrakes to it, I can get it slowed down. Makes the early career mode impossible though.
So I guess it's not quite fully working aerodynamically on 1.3.
