@swimminginsand they also make the cure because otherwise the world just ends, if the world ends the government has nothing to govern over.
But then they also make super soldiers, so the cure either ends being destroyed along with the last remnants of government and the world ends, or the last remnants of government gets destroyed and the cure is slowly and inefficiently being distributed, but since the resources and people to make more of the cure got killed, the main way the cure is spread is by people that are immune to it just having a lot of sex.
So it's like the Last of Us minus the shitty sequel, retconning the main character into being a lesbian, and replacing shroom zombies with horny zombies? Okay.
1: He still have his penis because if the "bug" needs escape it can escape through intercourse. (Seems farfetched and not really plausible.)
2: He still have his penis because the bug can evolve if he have sex. (A possibility but not really an answer to why he didn't morph more.)
3: He cut the blood flow to his penis in time to stop the "bug" from evolving further or possibly reach where it needed to be. And that's why there is people who transform but keep their minds.
4: Maybe genetics? Bug/Him *Shrug*