Group daily schedule into [Start date; End date] intervals with the list of week days

SET DATEFIRST 1 -- Make Monday weekday=1

DECLARE @Ranked TABLE (RowID int NOT NULL IDENTITY PRIMARY KEY,                   -- Incremental uninterrupted sequence in the right order
                       ID int NOT NULL UNIQUE, ContractID int NOT NULL, dt date,  -- Original relevant values (ID is not really necessary)
                       WeekNo int NOT NULL, dowBit int NOT NULL);                 -- Useful to find gaps in days or weeks
INSERT INTO @Ranked
SELECT ID, ContractID, dt,
       DATEDIFF(WEEK, '1900-01-01', DATEADD(DAY, 1-DATEPART(dw, dt), dt)) AS WeekNo,
       POWER(2, DATEPART(dw, dt)-1) AS dowBit
FROM @Src
ORDER BY ContractID, WeekNo, dowBit

/*
Each evaluated date makes part of the carried sequence if:
  - this is not a new contract, and
    - sequence started this week, or
    - same day last week was part of the sequence, or
    - sequence started last week and today is a lower day than the accumulated weekdays list
  - and there are no sequence gaps since previous day
(otherwise it does not make part of the old sequence, so it starts a new one) */

DECLARE @RankedRanges TABLE (RowID int NOT NULL PRIMARY KEY, WeekDays int NOT NULL, StartRowID int NULL);

WITH WeeksCTE AS -- Needed for building the sequence gradually, and comparing the carried sequence (and previous day) with a current evaluated day
( 
    SELECT RowID, ContractID, dowBit, WeekNo, RowID AS StartRowID, WeekNo AS StartWN, dowBit AS WeekDays, dowBit AS StartWeekDays
    FROM @Ranked
    WHERE RowID = 1 
    UNION ALL
    SELECT RowID, ContractID, dowBit, WeekNo, StartRowID,
           CASE WHEN StartRowID IS NULL THEN StartWN ELSE WeekNo END AS WeekNo,
           CASE WHEN StartRowID IS NULL THEN WeekDays | dowBit ELSE dowBit END AS WeekDays,
           CASE WHEN StartRowID IS NOT NULL THEN dowBit WHEN WeekNo = StartWN THEN StartWeekDays | dowBit ELSE StartWeekDays END AS StartWeekDays
    FROM (
        SELECT w.*, pre.StartWN, pre.WeekDays, pre.StartWeekDays,
               CASE WHEN w.ContractID <> pre.ContractID OR     -- New contract always break the sequence
                         NOT (w.WeekNo = pre.StartWN OR        -- Same week as a new sequence always keeps the sequence
                              w.dowBit & pre.WeekDays > 0 OR   -- Days in the sequence keep the sequence (provided there are no gaps, checked later)
                              (w.WeekNo = pre.StartWN+1 AND (w.dowBit-1) & pre.StartWeekDays = 0)) OR -- Days in the second week when less than a week passed since the sequence started remain in sequence
                         (w.WeekNo > pre.StartWN AND -- look for gap after initial week
                          w.WeekNo > pre.WeekNo+1 OR -- look for full-week gaps
                          (w.WeekNo = pre.WeekNo AND                            -- when same week as previous day,
                           ((w.dowBit-1) ^ (pre.dowBit*2-1)) & pre.WeekDays > 0 -- days between this and previous weekdays, compared to current series
           

SET DATEFIRST 1 -- Make Monday weekday=1

-- Get the minimum information needed to calculate sequences
DECLARE @Days TABLE (ContractID int NOT NULL, dt date, DayNo int NOT NULL, dowBit int NOT NULL, PRIMARY KEY (ContractID, DayNo));
INSERT INTO @Days
SELECT ContractID, dt, CAST(CAST(dt AS datetime) AS int) AS DayNo, POWER(2, DATEPART(dw, dt)-1) AS dowBit
FROM @Src

DECLARE @RangeStartFirstPass TABLE (ContractID int NOT NULL, DayNo int NOT NULL, PRIMARY KEY (ContractID, DayNo))

-- Calculate, from the above list, which days are not present in the previous 7
INSERT INTO @RangeStartFirstPass
SELECT r.ContractID, r.DayNo
FROM @Days r
LEFT JOIN @Days pr ON (pr.ContractID = r.ContractID AND pr.DayNo BETWEEN r.DayNo-7 AND r.DayNo-1) -- Last 7 days
GROUP BY r.ContractID, r.DayNo, r.dowBit
HAVING r.dowBit & COALESCE(SUM(pr.dowBit), 0) = 0

-- Update the previous list with all days that occur right after a missing day
INSERT INTO @RangeStartFirstPass
SELECT *
FROM (
    SELECT DISTINCT ContractID, (SELECT MIN(DayNo) FROM @Days WHERE ContractID = d.ContractID AND DayNo > d.DayNo + 7) AS DayNo
    FROM @Days d
    WHERE NOT EXISTS (SELECT 1 FROM @Days WHERE ContractID = d.ContractID AND DayNo = d.DayNo + 7)
    ) d
WHERE DayNo IS NOT NULL AND
      NOT EXISTS (SELECT 1 FROM @RangeStartFirstPass WHERE ContractID = d.ContractID AND DayNo = d.DayNo)

DECLARE @RangeStart TABLE (ContractID int NOT NULL, DayNo int NOT NULL, PRIMARY KEY (ContractID, DayNo));

-- Fetch the first sequence for each contract
INSERT INTO @RangeStart
SELECT ContractID, MIN(DayNo)
FROM @RangeStartFirstPass
GROUP BY ContractID

-- Add to the list above the next sequence for each contract, until all are added
-- (ensure no sequence is added with less than 7 days)
WHILE @@ROWCOUNT > 0
  INSERT INTO @RangeStart
  SELECT f.ContractID, MIN(f.DayNo)
  FROM (SELECT ContractID, MAX(DayNo) AS DayNo FROM @RangeStart GROUP BY ContractID) s
  JOIN @RangeStartFirstPass f ON (f.ContractID = s.ContractID AND f.DayNo > s.DayNo + 7)
  GROUP BY f.ContractID

-- Summarise results
SELECT ContractID, StartDT, EndDT, DayCount,
       CASE WHEN WeekDays & 64 > 0 THEN 'Sun,' ELSE '' END +
       CASE WHEN WeekDays & 1 > 0 THEN 'Mon,' ELSE '' END +
       CASE WHEN WeekDays & 2 > 0 THEN 'Tue,' ELSE '' END +
       CASE WHEN WeekDays & 4 > 0 THEN 'Wed,' ELSE '' END +
       CASE WHEN WeekDays & 8 > 0 THEN 'Thu,' ELSE '' END +
       CASE WHEN WeekDays & 16 > 0 THEN 'Fri,' ELSE '' END +
       CASE WHEN WeekDays & 32 > 0 THEN 'Sat,' ELSE '' END AS WeekDays
FROM (
    SELECT r.ContractID,
           MIN(d.dt) AS StartDT,
           MAX(d.dt) AS EndDT,
           COUNT(*) AS DayCount,
           SUM(DISTINCT d.dowBit) AS WeekDays
    FROM (SELECT *, COALESCE((SELECT MIN(DayNo) FROM @RangeStart WHERE ContractID = rs.ContractID AND DayNo > rs.DayNo), 999999) AS DayEnd FROM @RangeStart rs) r
    JOIN @Days d ON (d.ContractID = r.ContractID AND d.DayNo BETWEEN r.DayNo AND r.DayEnd-1)
    GROUP BY r.ContractID, r.DayNo