I don't recall any of mine looking like that there.
Maybe one of the more experienced people here will have some insite.
Further thoughts :I had seen something like that elsewhere so I checked my books and found something similar in "The Bearded Dragon Manual" by Vosjoli etal, p138 , the swelling looks very similar to your hatchling's swelling so it could be an abscess in the hemipenal region.
Would be very wise to make an urgent appointment with an experienced reptile vet , at least to have a biopsy taken and to determine if it requires a surgical intervention.