Yes, a physical fight. They fight somewhere (some planet, doesn’t matter where) as a flashback, just like the flashbacks to Luke’s Jedi temple destruction.
We don’t see the end of the fight, but understand that it was inconclusive, and the reason why Luke retired to his island.

For me it makes sense that we get OT characters at the start of the ST, but then move on to the new ones.
So Luke should only fight at the beginning and then become a secondary character, only training Rey.
He fails with Ben’s training but succeeds with Rey, thus completing his arc *.

Just an idea, very personal but it’s something I’d like to see. 😉

another option is having both Luke and Leia to force project into Kylo, and then die at the same time. Makes perfect sense and also completes their arcs.