Finally, an informed, expert response in this thread.

To explain this to the others, this thingy extends from an ambisexual genital tubercle, whereby the endoderm extended. Whereas the mesoderm gave rise to the corporal bodies/erectile tissue and connective tissue stroma, and before that, the ectoderm gave rise to the outer mesoderm, the the resulting genital tubercle we see in the photo turned this lady into a boy, or a 'lady boy', or AKA a woman. Another illustration, here.