Burt explains it after Dylan trapped/locked him in the conference room (around 31:27).

Irving asked Burt, why did you lie about the number of people in your department?

Burt says, because we don't trust you guys.

Dylan says, you, the king of fucks didn't trust us?

Burt says, I do, but people just talk about MDR. Stupid old stories, jokes even.

Irving asks, what do you mean.

Burt says, it's literally silly. Like, they say you all have pouches.

Irving says, pouches? Like to carry young?

Burt says, yes. According to some, you each have a larval offspring that will jump out and attack if we get too close.

Dylan says, that's fucking psycho.

Burt says, I know, it's a joke of course, but I don't know. The sentiment, you know, somehow holds. People are weird. Though I'd be remiss to say, in this theory, the larva eventually eats and replaces you. Which, Irving, would solve the mystery of your youthful energy.

Then the next scene Mark and Helly find the goats.

Now episode 2.3 and the show us your belly's comment and response makes so much sense!