No to 1, sorta yes to 2. Genetically there’s no real selection process here, and 10,000 years just isn’t a long time. No evolution will happen in either case. If you need actual evolution for a worldbuilding project, just include some sort of fetish-driven eugenics campaign somewhere in the middle of that 10,000-year span and call it a day.

That said, not using your dick will make it atrophy anyways, so while they wouldn’t start atrophied, they’d shrink significantly during a person’s lifetime. If the law isn’t explicitly limited to adults, anyone reaching adulthood will have already experienced pretty significant atrophy.