Possible reasons why this is funny:
- Being fooled by an attractive woman who turns out to be a man is funny.
- Inadvertently exposing a body part that should remain private is funny.
- Being unaware of impending embarrassment – as long as you’re not the victim – is funny.
- When you figure out that it’s really a bike seat and you were fooled is funny.
- The human penis is funny.
Source: The wide world of the internets.