Hanging a towel on your junk is a joke that Jeff Foxworthy made about the side effects of Viagra. I learned about the pencil trick from off color office banter at some point in my working career.
They aren’t fooling me about what they are hanging doughnuts on. It’s below the belt humor.
People do this when they get bored. It is sophomoric, but funny to me as I have a 12 year old’s sense of humor.