I am asking if the it OK for a school to force a child to compete for their rugby team.
OK then, straight answer. Yes, my children's school, and the schools of most of my peers children do exactly that. A child could be excused for a valid reason - i.e on medical grounds (with note), or perhaps if there were extreme circumstances which made it not possible (having to spend weekends visiting a dying relative a distance away, court ordered contact in location too far to travel from etc). But it is absolutely accepted that if you are picked for the team, you play, and that you attend all practices. It's part of the school ethos, and children are proud to be selected and to represent their school.
Assuming you actively chose your child's school, and this is part of their rules/conditions, then you don't have a leg to stand on.
I might have sympathy if it was a school that you actively chose to not send your child to, but you got placed in by the local authority as the only choice. But assuming as this is a Grammar, you chose this over and above your local comp/SM, you can't cherry pick the bits of the experience that you want, and expect to opt out of other bits that the school deem compulsory.
It will be good for your child. Encourage him. In the absence of a medical condition, he will not be exhausted - on the contrary, daily sport is good for children and will give him extra energy.