Unfortunately, Benedict is conflating fundamentalism with literalism here. It's a common mistake (and "fundamentalist" has become essentially an epithet) although one that I am surprised to hear from someone as otherwise erudite and thoughtful as Benedict. Theological fundamentalism came out of the fundamentalist-modernist controversy of the early 1900s (https://en.wikipedia.org/wiki/Fundamentalist%E2%80%93moderni...) and none of its earliest and strongest proponents (Machen, Van Til, etc.) were literalists. In fact, they were quite the opposite.

While certain strains of fundamentalism have literalist tendencies, there is nothing implicit literalist in fundamentalism. Some might look at the Five Fundamentals [https://en.wikipedia.org/wiki/Fundamentalist%E2%80%93moderni...] and consider them implicitly literalist, but most of them are contained in the creeds and confessions that Catholicism and Protestantism hold together and so denying any of them would place one outside of either Catholic or Protestant doctrine.