They were checking to see whether the man in question was circumcised, which would tell them that he was probably Jewish. Circumcision of male infants is a nearly-universal ritual practice in Judaism, while circumcision of non-Jewish males was and is relatively uncommon in most European countries (except for Albania, Bosnia, Kosovo, and North Macedonia, which are majority Muslim or have significant Muslim minorities). It was a way to identify Jews who may have obtained false documents or otherwise managed to pass as "Aryan".

This was a common practice, among other places, on the Eastern Front, where Soviet prisoners of war were inspected (usually by the Gestapo) to weed out Jews and Communist Party members, who were taken away and executed. Prisoners who weren't identifiably Jewish based on their papers and weren't exposed as Jewish by their fellow prisoners were subjected to this type of inspection.

Of course, this wasn't a foolproof method of detecting Jews, since some non-Jews were circumcised and a small number of Jews were uncircumcised. To borrow a term from medicine, it was highly sensitive but not necessarily highly specific. One particular case I came across in my own research a few years ago illustrates this well. This man was a Jewish Soviet political commissar who managed to avoid execution and survive the war through a set of circumstances that honestly should be made into a movie. His unit was encircled during the Battle of Bialystok-Minsk in early July 1941, but he was able to avoid capture initially and made his way to a farmhouse, where the residents gave him a new shirt to replace his Army uniform shirt, which would have identified him as a political commissar by the red star on the sleeve (German troops were instructed to look for these by the Commissar Order, which commanded them to immediately execute all captured commissars). In another coincidence, despite the fact that he was Jewish, he hadn't been circumcised at birth, which meant that when he was captured and put through the inspection process at Dulag 231 in September 1941, the Germans weren't able to determine that he was Jewish and he avoided being executed on that basis as well. Obviously he still had to endure awful conditions (as did all Soviet POWs in German captivity), and was one of the small minority of prisoners captured that early in the war to survive at all, but he was able to avoid immediate execution despite meeting two separate criteria that would've led to him being killed if not for those coincidences aligning in his favor; he witnessed the execution of several other Jewish prisoners who were identified during the inspection that failed to identify him.

Sorry for meandering a bit there, but I thought that was an interesting anecdote that illustrated both why the Germans performed these types of examinations and why they weren't totally foolproof.

Sources:

Reinhard Otto, Wehrmacht, Gestapo und sowjetische Kriegsgefangene im deutschen Reichsgebiet 1941/42 (Oldenbourg, 1998)

Christian Streit, Keine Kameraden: Die Wehrmacht und die sowjetischen Kriegsgefangenen, 1941-1945 (JHW Dietz, 1997)

The United States Holocaust Memorial Museum Encyclopedia of Camps and Ghettos, Vol. IV (Indiana UP, 2022)

USC Shoah Foundation Visual History Archive, Testimony of Lev Frankfurt, Interview 28879 (25 March 1997).