Does setting the rotation of an object override the physics engine?

If I control a spaceship by changing its rotation directly, will that override any change the physics engine would have done? For instance, let’s say my ship hits an asteroid, and the physics engine calculates that the front end should be knocked upwards. Would using a control scheme that sets the rotation directly allow the player to negate the torque by engaging the controls in any direction at time of impact?

Yes.

You would have to use rigidbody.AddTorque or rigidbody.AddRelativeTorque.