Those are not testicles you are seeing. There is a structure there called the bulbous glandis. It looks like two big bumps on either side of the penis. The function of this structure is that it swells when he is mating with a female. The female clamps down on this structure and thats how they get "tied" during breeding.
So no, your dog isn't weird or anything. It's a normal structure.
I hope this information helps you out. Let me know if I can help you further.
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HI there. I'm glad it helps.
He doesn't have to be mating when you see it. I see it on my dog when he's at rest lying on his side. It's always there. Sometimes it's bigger, sometimes it's smaller and sometimes you can't see it at all. It's a normal thing and nothing to worry about.
You're very welcome. Have a great day!