It sounds like a little too much attention was given to the topic (penis) which probably
became a source of attention during potty training and continued to the point of obsession (escalation).
Terming would solve the immediate problem, sure.
I see a few things that could solve the issue, though.
1. "it was swept to the side" - Address it immediately, followed by awkward silence, wait for response.
2. "put his hands down his diaper to go down for nap" - Onesies solution.
3. "escalated to him pulling on his little sibling's genitals" - Onesies and nap mats should be a minimum of 4 feet from one another.
4. "trying to put his penis on display for all of the kids" - Onesie and more structured activities, longer playground times, distraction, and active ignore. "Teacher, look at my penis!" - "I can't. I am busy looking at Heathers awesome drawing. Can
you draw a horse, too? Come show me that."
5. "I have told parent about it everytime" - Too much discussion about this, keeps focus on his penis and gives him power over adults. (change the word penis to pacifier, potty training, refusing to eat, screaming, biting, hitting, etc. it is not the >thing< it is the attention garnered for the >thing<)