As for why Mossad didn't capture him: they didn't know where he was - they found his address in Argentina, but by the time they looked into it he had already fled [2].
[1] https://en.wikipedia.org/wiki/Josef_Mengele
[2] https://archive.org/details/houseongaribaldi00isse/page/250/
And:
> Mengele reportedly worked as a veterinary surgeon under the alias of 'Francisco Fischer' while living in Hohenau.[118]
Pity the poor dogs and cats.