I’ve actually done this as an experiment to see if it would cause overly-hard erections, sort of a mild form of chemical PE. I used 0.1% cream intended for arthritis relief.
Erect, I retracted and smeared the lotion on my glans and inner foreskin, and held the foreskin back to allow the lotion to dry and absorb in. I explicitly avoided getting any on the tip of the glans by the urethra, or inside the urethra, so the sensations were possibly different than Sigmoid encountered.
The first sensations took about fifteen seconds or so. It started warm, then ramped up from there. The intensity felt like it filled the glans and went back into the body along the top of the penis, and in the septum between the corpus cavernosa.
Intensity built for about ten minutes, to the point where I was afraid I’d made a mistake, then leveled off and stayed there. I’d agree with Sigmoid’s evaluation of 3/10. Maybe even only 2 out of ten. Fun rather than debilitating. And fun enough I decided to cover the shaft skin, and put some more on the glans and foreskin. The sensation increased only slightly, but I suspect it lasted longer than it otherwise would have.
Having read stories about touching one’s genitals after preparing peppers, I expected much worse. On the other hand, this was a controlled concentration, and I suspect the sensations were more consistent because of that.
Mechanical disturbance of the penis (shaking, light taps, masturbation) caused the intensity to briefly increase, then reduce back to the baseline of pain. The skin was hot to the touch and a little itchy, and felt slightly inflamed. It definitely gave my normally-pink penis a redder tinge. The erection was not appreciably harder than normal. Nor was the orgasm especially excellent, but it wasn’t bad, either.
I tried a few variations on other days to see if I could get super-hard erections experimenting with dose and location, but the experience was about the same each time. I haven’t identified any loss of sensation from using capsaicin a few times like this.
I suspect the experience would irritating or painful for a woman if you were to have sex after applying the lotion externally and then penetrate her. I always wait a couple days after before having sex.
All in all, a worthwhile experiment, but I wouldn’t recommend it for men with a low tolerance of pain.