I like that type of code, so yes, maybe it's a darling.

It's easy to make it more readable by aligning the code with the dots, so that it becomes a pipeline:

  @sentence = @sentence.split(' ')
                       .map!{|x| x = x[0..0].upcase << x[1..-1]}
                       .join(' ')

I definitely prefer that to half a screen page of crappy imperative code, where people over time will add lots of side effects etc.

Besides, the middle part is clearly a strawman because

  @sentence = @sentence.split(' ')
                       .map!(&:capitalize)
                       .join(' ')

but yeah. ;)