Take another look at the diagram. You should notice that the capacitor is not in series with the switch. Instead, it's in series with the DTR line that would be connected to a serial port for auto-resetting before uploading. According to the diagram, the only thing in series with the manual reset switch is a 220 ohm resistor, which should be more like 10k according to the datasheet. 220 ohms should work, but seems quite small to me.