Sometimes it is an illusion created by comparative size, in other words, a bigger belly means a penis looks smaller by comparison. Sometimes the body fat seems to grow outward in the abdomen and 'bury' the shaft a little at the base, making the penis look smaller. It has not actually shrunk. The analogy would be a stick buried in the dirt, and someone piles more dirt around the base of the stick. The stick is not shorter, but less of it is showing than before. I've heard a man who lost weight say that his penis suddenly seemed longer.
It is said that if you are fat or too much obese, then it results in loss of Penile length.