I think the angle of the stab was wrong for genital mutilation--it appeared more to be into his side (ie, soft flesh wound) and also, Foyet makes the comment that Hotch's scars will mirror his (another form of control). As I assume Foyet did not stab himself in the genitals, I don't think that's what happened.

I'm of the opinion that what happened was a rape whether it involved penetration or not. I think it's equally possible that Foyet was pressing himself against Hotch and achieved his climax that way--which is still degrading and objectifying for the victim and is in no way less serious then penetrative rape, especially when the stabbing is added into the equation--or quite literally raped him, in the legal sense. After all, we don't see all nine stabs or what happens after. His flashback cuts out before Foyet is finished, which leaves a huge blank spot. There's also the added trauma of Foyet bundling him up and taking him off to the hospital, conflating caregiving with sexual and physical assault.

This is network television. Showing a male rape is more or less impossible. I also think that the writers might be trying to get us to think about the implications of rape and the fact that it can be more than a penetrative act.