i think it's hard to tell whether something is literal or not when it involves non-physical entities that we can't just objectively go up and ask. i personally take the stance that every version of a myth has some truth to it, that each version shows us a side of the deity that is real, even if it's not often seen or explored.
i feel like a lot of the discussion about the two of them duking it out to be the top sorta misses the subtle aspects of this story and why the rape may have been included as it was.
i think the first point to mention is that the interaction btwn them highlights that sex with set is fruitless. he's known for having a big sexual appetite, but none of his sex produces anything viable. even when he's trying to overcome the crown prince, he still can't convince his semen to, like, do anything useful lol. he is horny, but not fertile.
semen also overlaps with poison, i don't remember if they're the same word or just similar, but there is a specific line btwn poison and semen that should be considered when reading the myth. that his own poison (semen) is used against him in the end.
horus is able to take this poison and through the help of his mother, is able to use it to trap set. in many ways, he's taken setian energy and managed to transform it into something more useful. to me, this partially underscores the need of the Crown to be able to take chaotic isfetian energy and use it to push forth the Crown's agenda. put another way, the king needs to learn to harness isfetian energy and transform it into ma'atian energy.
Alison Roberts has an entire chapter about the contendings, and she posits that much of the parts of the myth are really there to establish a different role between aset and horus, describing it as "a brutal, but necessary rupture btwn mother and son." aset is no longer just a mother, but has been reintroduced to the solar circuit, being forced to give up her maternal over-protection that limits her son, thereby giving her (and Horus) new life and possibilities.
she also states that this story allows horus and set to experience the deepest and darkest sides of one another, and that the story highlights the coming of age of horus, and the removal of his naivete, youth, purity... whatever you wanna call it, as he takes on the weight of the crown.
i think it's also worth mentioning that this happens after osiris is introduced into the pantheon, that set and horus' relationship was different before the introduction of HSA and incorporating these entities into the myth. Ian Taylor purposefully splits set into set the younger and set the elder to reflect this change.
also, worth mentioning that the contendings is meant to be a little bit extreme. there is a paper on sacred humor in AE, and it talks about how the contrendings is sorta meant to be exxxxtra and that the gods act out in ways that is inappropriate due to the nature of how the contendings was told and shared every year.
tl;dr if someone wanted to be like "i don't wanna work with set because he raped HSA" i'd be like "that's fair". to me, there is nothing wrong with seeing the literal aspects of the myth and reading them that way (also HSA rapes aset in some versions of the myth rip. Roberts says that this is because he's becoming irreparably changed due to his interaction with set).
but i also think it's important to understand that most of our myths and stories have layers and context that we probably miss out on due to not being able to speak the language (the egyptians love puns) and not being within the culture itself.