was told the rack and pinion set was torn. What does that mean - where is it torn?

Can always seek another opinion from independent auto repair facility. This is rather unusual - I’ve witnessed this in the past but it is not a ‘common’ failure. It is not ‘uncommon’ for ‘some’ fluid to be present inside of the covers. Should ask dealer personnel what “tore” these parts.. *Hands-on* inspection will be required before any real conclusions can be drawn.