Toddler getting his bits out :-o

[Putaforkinmeimdone]

Bit awkward, but would appreciate any advice from anyone who has dealt with this...

My two year old is going through a stage (I hope, anyway!) of regularly putting his hand down his nappy.
He sometimes gets his willy out, not the end of the world at home but less appreciated at nursery or public settings.
If relevant, we are trying to potty train. When on the potty he plays with it.

Any bright sparks know how to deal, do we ignore? Do we tell him NO?
I am a bit unnerved by nursery reporting him exposing himself there, and it’s not ideal to flop it out in front of strangers. Advice appreciated

It was a phase here.
I asked them to take their hands out of their pants as I reckon it was subconscious some of the time. I can't remember how long it lasted but they weren't doing it at pre-school. After the Willy fiddling, it moved to requests that they pull up their trousers because I could see the waistband of their boxers.

Thanks @TicTacTwo