Originally Posted by Dport
This is pretty much what I always assumed.
The body is pushing a lot of blood in to the muscle group you're working at the expense of other parts of the body.
There is also the protection mechanism of less exposure, a lot of animals retract their penis inside their body during fight/flight reactions as protection of reproductive system is part of that, secondary but linked to blood flow redirection. Before clothing it would make sense for your package to shrink if you were going for a run, otherwise oooouch