The Screen Capture action captures a specified object or area of the screen to the system clipboard or a named clipboard.
Select the object or area to capture from the Capture pop-up:
Select which clipboard to write to from the to pop-up.
Two options for the action are available from the gear icon in the top right corner of the action:
Nominal resolution means the images will be captured at 72dpi despite a possibly higher dpi used by the monitor (for example, if you have a retina monitor, without this option the screen capture would be at 144dpi).
Keyboard Maestro does NOT replicate OSX's interactive capture area functionality – e.g. ⌘⇧4.
Unfortunately Apple has not provided an API for that.
Therefore to use it in a script you need to use an Execute a Shell Script action:
This will capture interactively to the clipboard.
Enter “man screencapture” in the Terminal.app for more information.