Thanks Steve, much appreciated! I wonder why the capture is disabled during live view, this is a major inconvenience.
It's an inconvenience, but I've come up with a workaround to taking a capture while in live view. Using REWASD I created a custom macro and mapped it to one of the keys on a small wireless keyboard, which pauses the live view, takes a shot, and restarts the live view. I can use the keyboard as a remote next to the camera, or as a wireless shutter release, since you can't take a shot from the camera while the live view is active. It's not pretty, but it works. Not sure why this can't be implemented in C1, seems like a fairly easy thing to program pause/shoot/play when the shutter button is clicked.
I have a bigger problem however, which I've been trying to find a solution to without success. Given that I shoot primarily still life, I work tethered in live view all the time on a PC workstation. The problem is that the live view is very slow/choppy, running at around 1-2 frames per second, which is unusable in a fast paced workflow. This happens regardless of the cable size, or USB port type. I've tried very short cables, and both USB-C/USB 3.0 ports. While doing these tests, I discovered that this only happens when the camera is set to RAW mode. If the camera is set to JPG, the live view is smooth and fast. Also, this is not just C1 related, because the same thing happens with the Fuji Tether Plugin Pro and Lightroom.
I've been going back and forth with Fuji Support on this over the past 2 weeks. They confirmed that this happens on their end as well, but the answer I got was "that's the way it is right now". I'm wondering if anyone else with the same issue has come up with a solution, and if this is a hardware limitation of the camera (which I doubt), or something that can be addressed with firmware.