If that isn't the official name for this toy, it should be:
Yes, that is indeed a real Lion-O action figure, part of the upcoming Bandai toy line in conjunction with the upcoming new Thundercats cartoon.
And yes, it looks like he's holding his weenie.
Because apparently all toy manufacturer/designers the world over pee sitting down. There can be no other explanation as to how a toy like this can be made in this day and age.
You just know this toy also has some sort of motion feature, and maybe even yells 'Hooooo" - which is just going to add to the 'fun' when someone gets their hands on this little guy (pun intended) and posts a YouTube video of his arms going up and down in his lap and yelling 'Ho ho hoooo ho ho hoooo!'
Because if there's anything that matches toy designers' lack of foresight, it is toy collectors' love of juvenile humor.
If you want to be one of the first to make Lion-O spank the Snarf, you can pre-order this guy at Big Bad Toy Store.