My vote is no, not on the grounds of being both disgusting and disturbing (though that is part of it,) but the fact that it is purely aesthetic. It serves no purpose other than being a wobbly penis. The devs have better things to do than program genital physics. Besides, rust is meant to be a rather serious survival game, if the only reason you have to add it in is realism and "it is funny," then that gives me more reason to disagree. Now tear me apart if you will.
Someone actually took time to make a penis model for the game that serves no purpose other than being a penis model
Edited:
So I'd have to say no, they really don't