There is no reason to give a legendary signature move to a Pokemon that has little reason to use it past the typing. Plus, Spacial Rend, while not great, adds 15 base power and that could be game changing, just restrict it to the normal Dragon Pulse.
Also, why is everyone saying to restrict CAP8 to only Overheat/Hydro Pump. Basically all the major dragons learn Surf, except for maybe Flygon, and all of them learn Flamethrower/Fire Blast except Kingdra(I think) which doesn't have it obviously because it's a Water type. Giving it Surf and Fire Blast/Flamethrower is not a big deal, Steel types were not great checks to this except to resist Dragon, and Heatran is not a main counter either. UnSTAB Surf/Fire Blast don't do that much apart from allowing it to hit a couple possible threats, and if this gets Calm Mind, then most sets involving a stat-up move will only use one of the two moves since CAP8 will most likely use it's two STABs on all it's sets. All Water/Fire moves should be allowed, there is no reason otherwise.
Focus Blast/Aura Sphere should be controversial, considering how they break TTar which is otherwise a great hard counter vs. CAP8. They don't do all that much vs. Blissey/Snorlax, but that's where Focus Punch comes in. As I said before, Focus Punch eats up a valuble moveset to hit 2 Pokemon, and it would be a limiting factor to CAP8, so it should also be controversial. Explosion should be disallowed, as it would shred Blissey and Snorlax and is too versatile of a back-up move to be given to CAP8. Volt Tackle/Outrage should be allowed as most dragons get Outrage and a lot of Electric types get Volt Tackle, and they are not great moves for CAP8 in any way regardless. For priority, Vacumn Wave is a great option as is a special Electric priority move, but only with 40 BP not 80.
i agree with a lot of this except the surf part.
i hadn't thought of vacuum wave, that could really work.
minor: you say a lot of electric-types get volt tackle, but it is pichu, pikachu, and raichu exclusive