First let me say I've never done this but have seen it done . Put some super glue on it and glue it up a little or fold it over and glue it to itself . Saw a guy do this on a heifer the had a little extra navel in her
It is genetics. In Texas, if they have enough "sheath" often they are shown in the American Breeds classes. I know some folks who put those castration bands around the the flabby part of the sheath to make it fall off and look smoother.