If you leave the valve cover on the head, you'll probably have a hard time making sure you tap it perfectly perpendicular. You can use a level on the tap, but I wouldn't worry too much about that, if the failed rethread is too jacked up, then I'd say to take the valve cover out (and also inspect the rockers). I'd just try using a tap and your best judge judgement to drill/tap straight. The distance from the end of hole in the valve cover to the cam is probably a bit more than an inch, which gives you enough space for the pin to fit the cam hole, even if the threading is not made perfectly straight.
I think though you have another problem, due to timing belt wear and maybe due to previous owner not perfectly align the cams when he did the previous timing belt, there was a slight tension in the pin when he torqued the cam sprockets, and this also explains the stripped threads... When you torque the sprockets, if you don't use the Miller tool and use the vw "v" sprocket tool, when you apply torquing force to the sprocket nut, you'll need to perfectly balance the force in the v tool, to help the cam shaft stay in place, otherwise you put tension in the locking pin. Just try to slightly torque the sprocket nut without countering the force and observe the cam lock pin moving up/down... Which causes thread stripping.
My advice is this: time the crank, time one cam shaft and don't worry about the other one yet. Take the timing belt out, then align the other cam using the sprocket nut and a wrench. Then lock the other cam shaft, then remove the sprockets. Before all that use timesert, not helicoil, because if you use helicoil you need to remove the valve cover to cut the pin from the helicoil, unless you want that pin to fall in the cyl head... Helicoils won't allow you to insert the timing pins through unless you remove the torquing pin they come with (that allows you to use the helicoil tool to screw the helicoil in). Plus timesert is a solid cylinder of metal, not just a spring like helicoil, that may not thread in on the correct pitch.
Btw, your valve cover "caps" for the valve cover may also have some messed up thread, just get any short bolts m10x1.0 and use them instead, you may buy new oem for about 4-6 bucks each, but is not worth the hassle...
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