The testicles shrink too, I think. That's probably why when the tgirl is lying on her back, the scrotum looks empty, because the testicles can "fall" into a sort of cavity inside the pubic bone.
(The testicles actually start from there, somewhere in front of the bladder, surrounded by the pubic bone. As the infant matures, the testicles descend into the scrotal sacs)
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