500mA is the peak current rating. This IC is designed to drive the capacitive load of a power MOSFET, at a frequency low enough that the Gate capacitance is charged in a small fraction of the PWM cycle. To find out how much current it can deliver continuously you need to calculate the average power dissipation.
Typical FET on-resistance is 12Ω on the high side, so the power dissipation at 200mA will be 0.2*0.2*12 = 0.48W. But the absolute maximum power dissipation rating is only 0.35W, so it will burn up. Worse, at startup the motor may try to draw 5 times the normal running current or higher, so the IC could fry even before the motor gets up to speed.
The solution is simple. Use the MCP1401 to drive a power MOSFET which is rated for at least 2A (10 times the rated motor current). Alternatively you could use a MOSFET rated for 2.5V Gate drive (eg. IRLML2502), and then you won't need the driver.