Hasbro makes Play-Doh. They also make lots of toys that cut or press Pay-Doh into shapes. You can imagine that a tube you put extrudable material into might be vaguely phallic in shape. The frosting press in my kitchen drawer is tubular, too.
Heck, the Saturn 5 rockets men went to the moon in are vaguely phallic. Bill Clinton apparently noticed the phallic nature of cigars during his time in the White House. Everything from bananas to cucumbers have been commented on for their shape.
So the parents that took a look at their kids Christmas toy and got worked up by the shape of it are probably projecting, right? And to demand that Hasbro come up with a different design and provide free replacements to their customers is just evidence of their rigidity. They're obviously using this as an opening to insert their own issues into.
The way the toy works is you wrap your hand around it, press down and the Play-Doh squirts out the end.