So this is actually not that weird? Like, everyone that saw this thing must have thought "WTF they don't come out of the armpit (of an otherwise male-ish torso)".

There are plenty of more natural looking breasts on the Sistine Chapel frescoes. Leonardo De Vinci understood breasts. Michelangelo had female friends and mistresses, some of whom inspired his Sistine Sibyls. Because of this, I think this theory might be a bit simplistic. The scale of the sculpture or fresco also affects how the chest is going to look, Raphael and Michelangelo painted huge frescoes meant to be seen from hundreds of feet away. They adjusted the proportions of huge painted bodies so that they looked natural and balanced from the intended viewing distance. Up close, the same image would look distorted. Reference the 1992-1997 restoration of the Sistine Chapel ceiling. The close up images taken from the restorer's platforms look stretched out and weird, compared to photos taken from the floor of the Chapel.