Phallic symbols means imagery that’s related to dicks. He’s basically saying that guns are a way to compensate for a perceived lack of manhood.
But more specifically, he’s making reference to the fact that most gun-toting/mic-toting homophobic rappers are unaware or unwilling to admit that their guns/mics are stand-ins for their dicks (or lack thereof). And when these rappers swap mics, the tragic, ironic, homoerotic image they unwittingly present is that of two gay-haters fellating each other. Gulp!
