How can someone live in a Poste Restante?

Question

In "The Worst Crime in the World" by G. K. Chesterton, Sir John was talking about his son who just left the country:

“Some people I never heard of, called Grunov, have been pestering me, of all people, about his whereabouts,” said Sir John; “and I’ve just come in to send off a wire to tell them that, so far as I know, he’s living in the Poste Restante, Riga. Even that has been a nuisance. I came in yesterday to do it, but was five minutes too late for the post office. Are you staying long? I hope you will pay me another visit.”

How can someone live in a Poste Restante? Or he just meant live in somewhere close to the Poste Restante?

And why was this phrase written with Capital letters?

Answer 1

It means that he does not know where his son is living. He is communicating with his son through Poste Restante, Riga, and knows nothing more. It is a joke.

It is in capitals as though it is the name of a hotel.

EDIT: Humorous speech and slang is very difficult for someone who has been taught English to get. Words are used in weird senses, etc.

Answer 2

It uses capital letters because it's being used as a proper name.

For instance, the Canadian post office is named Canada Post, with capitals.

According to the Wikipedia entry for poste restante, several countries use it as a proper name, in addition to it just being a common noun:

Australia
Poste Restante is a long-established service within Australia run by the national postal service, Australia Post, which allows one’s post to be sent to a city-centre holding place

Hong Kong
In Hong Kong, Hongkong Post is responsible for handling the mail and mail can be sent to General Post Office only.

At the address side, mark the mail with "Poste Restante" or "存局待領" in bold.

It would typically make more sense if the passage were living at the Poste Restante, Riga (using it as a kind of address). However, the odd preposition aside, it's still using the common noun as a proper name.

I'll note that Riga is the capital of Latvia.

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It's also a kind of joke. It would be similar to the following:

She spends so much time in her car, that she practically lives there. I might as well address letters to her at Her Car rather than her street address.