
You aren't seeing things. Uke is intersexual, which means he has features of both male and female genitals. It doesn't come clear here though which chromosome set he has. Intersexuality isn't something new or scary, you can find a lot of information and documentaries about it even in YouTube.
The norm used to be that parents and doctor decide the gender of the baby and then the baby's genitals will be modified accordingly "for the baby's sake". This has however brought a lot of psychological issues since sometimes the person's chromosome set is male, but he has been decided to brought up as female due to the genitals.
More information is gathered all the time and some parents nowadays decide to leave their baby without the operation. :)

Labia = scrotum. They're the same thing. See during fetal development if the gonads get flooded with testosterone, they become testicles and they drop into the labia, becoming what we're familiar with as balls. So if his gonads (ovaries/testicles) are inside, then he'd just have the labia.
Don't forget we all start out female.
I just noticed that the uke has a dick and a vagina next to it...am I imagining things???