I cracked up when I saw this thread title. It's a question I've thought about a lot, whenever I see naked men cupping themselves. It's not protecting their dignity (IMHO), and it's certainly not because they've got something other guys don't have. Nobody present thinks to themselves "Oh, thank God he's cupping his dick and balls, otherwise I might see something." Nobody.
If it's accidental, quickly grab your shorts/towel/nearest available covering and cover up, or relax, realize we all know you've got a penis and balls and - literally - just let go. And if you're deliberately nude, why in the Hell are you covering yourself. That's just ...weird.
Yes, I'm being dismissive and - hopefully - a little humorous. But c'mon guys, literally every adult either has a dick or has seen one.
As Elsa sings in Frozen: Let it go.