It's super obviously fake, perhaps a mix of both prosthetic and cgi, but very clearly, obviously and objectively fake.
Two things annoy me about this,
1. The dick is comically fake, if you are going to do a fake dick at least make it believable. I get the point of the scene is to make the other guy insecure about his own size, but considering we never even see the other guys dick to compare it's pointless to make it as laughably huge as they did. They could have removed two inches from that dick and it still would have been considered big.
2. The show creator said in an interview how important frontal nudity was to her to be included and how it was more than just a shock moment. She continues to talk about the art and creative process surrounding the decision to show a penis on the screen. This annoys me because not only is the one frontal scene we get pathetically fake, they go to great lengths to digitally black out all other potential frontal scenes in this show. For example the scene by the pool when they go skinny dipping, that would have been a perfect moment to have a tasteful REAL frontal scene from both the male and female actors, but instead they digitally blacked out their groins, so even if you pause the scene and increase the brightness you wont see anything. Even when the guy dives into the pool they digitally add extra bubbles to cover his dick. The show creator is a hypocrite.