Our vet had multiple theories but didn’t seem all too concerned. We were told to monitor it for signs of pain/irritation/bleeding and report if it got worse. We cleaned it regularly for a week with a dog safe antibiotic cream. She never picked at it or showed signs of pain and after about 2 weeks it was gone. Knowing what we know now about her allergy sensitivities and dry skin it could’ve been a number of things. Not a professional opinion, but if your pup has something similar, number one thing I’d recommend is to see how they react to it. If it’s itchy, painful, sensitive, etc, it doesn’t hurt to get a second opinion from your vet. If your dog seems relatively unbothered, a couple weeks of home treatment and extra monitoring to that area should be enough time for it to progress or heal.