3 days is not long enough .. wait longer. ddo not dig them up. stop fiddling. over-doting is the cause of your problems here. Rotting is more of an issue closer to 10-14 days and no sign of sprout.. at that point if you want to kill it by digging and fiddling with it, go ahead, lol.
3 days is far too short for so much mold to grow. mold is fungus,, "myco" is fungus too... unless you have a lab, you can't assume it's 'mycorrhiza' or not, The amendment fungus "myco" needs roots to survive, which there are none when you start, so this is more likely some foreign mold that was in the substrate. it is often not a problem and only feeding off decaying organic material. It's still not optimal, especially for seedlings. It was probably stored outside at some point in transportation or the store you bought it from. Often get gnats this way too. Every fungus i know of has mycelium, for the record - they are the equivalent of roots for fungus. (https://biologydictionary.net/hyphae-vs-mycelium/). i'ts made up of hyphae.
even without a humidity dome, there's no need to water within 3 days... you musta been spraying or watering it often? superficial watering is a bad habit. don't do that. that's more about something in your head than reality.
water entire substrate, get a little runoff to be sure.. then stop. stop fuckign with it. let it do its thing. press into substrate about 1 digit of finger (use pinky if you got big hands). drop seed in. loosely cover from side and gently tamp down -- moist and dark... a humidity dome is fine. shoudln't have to water for at least a week using a humidity dome and by that time should have a sprout and roots and ready for normal watering habits. allow top layer to dry, then re-irrigate, not before. always water entire pot, never a portion.
that's it... if you have a shell head, bury slightly deeper next time... if it takes more than 3-5 days, bury it not as deep next time. if in a cold climate, a heat mat is useful. substrate temps 76-80F will be faster and more consistent germination/sprout rates.