Soulcalibur VI's character creation tool has some fantastic potential, allowing for players to create accurate representations of pop culture characters to play as in game. It also contains some less family-friendly creations, like lizard man with a gigantic schlong.
— Rhys ? (@AltZero_) October 19, 2018
The creation is a result of combining an apple, cylinder and heart, adding them to the lizardman, and giving it Voldo's crotch filled moveset so it gets thrust at unsuspecting online players.
Reddit shows a number of other characters are starting to get the massing dong overhaul, and it's likely only a matter of time before Bandai Namco begins to take action, removing these creations or detecting them before they can be created. However, for now, it's trouser snakes abound.
We will update if Bandai Namco issues a statement on this story.