Yup, it's both bell pepper and the spice.
We just say the color and add the word pepper to it, like: פלפל צהוב
The red one has a special name though, it's called "גמבה" (gamba), you can still say "פלפל אדום" though.
Why not use the word pepper then? It is also the veggie and the spice. I'm a native English speaker and I've never heard the word capsicum.
It's only you. I bet you've heard it and didn't realise. It's on Indian menus, it's in topical analgesics like ben gay...
What you should be thinking is: I hope my eyes never FEEL capsicum (aka pepper spray).
Do you mean that "פלפל" on its own would mean the spice and if you were referring to the vegetable you would add a colour for example "פלפל כתום"?
All part of the same pepper processed differently:
פלפל שחור Black pepper, so the rest
שחור. Black, לבן. White , ירוק green וורוד. And pink There is also rainbow which is just a mix , and varietals...
For spices. Black pepper, white pepper, green pepper, there is rainbow pepper...