A while back the shelf which held my rotor housings collapsed, at first I didn't notice any damage but while cleaning and prepping for my rebuild I've noticed this nick in one of my rotor housings.
My first instinct is that the housing is shot, but I'd like a second opinion. The nick does not protrude into the housing, but there is a slight bulge on the outer surface where the housing is supposed to run flush with the iron. Is this worth risking, or is it over for this housing?

 

I would prefer to get a replacement, but I would also prefer to have 2 housings in equal condition.

If budget is a thing, I think you can get away with it if you make sure surface is smooth and the apex seal corner piece is at the other side of the housing.
Looks like its just about to hit compression when the apex seal passes that spot?

 

Ding is right next to the intake, which I'd guess is good news. My main worry is that sanding down the area would compromise the tolerances for the area around the coolant seal, since there's a bump on the side of the housing

 

I personally don't think it would become an issue with the coolant seal. Carefully sand flat the side and perhaps use a viton o-ring if that wasn't already the plan.

When o-ring path is flat I would say its fine. Not ideal, but fine