There seem to be at least two distinct types of appeal toward genital mutilation, the type that views it as a sexual act, and the type that views it as violence.

When it is viewed as a sex act, it tends to be depicted as a positive thing, where the victim wants it to happen and enjoys the experience, much as one finds in other sexual fantasies. There's probably no way to explain the source of this appeal, just as any other sexual attraction is impossible to explain.

When it is viewed as violence, it's surely depicted as a negative thing, and the appeal is much the same as the appeal of any other sort of violence. For some inexplicable reason, people love to watch violence, especially harmless fictional violence. It's like the safe thrill of a roller coaster, exciting and fun.

The violent type has an extra sexual component to the appeal, in addition to the ordinary appeal of violence. Losing any limb is horrific because of the way it will mess up a person's life, but losing your genitals tends to only mess up your life in a very particular way: sex. Therefore the horror expressed by the victim can be seen as a kind of sexual horror, because it based in sexual desire. It's like an extreme form of sexual tension, where people want to have sex but can't, only in this case the reason they can't have sex is physical and permanent.