Making a dick joke might be offensive, but it saddens my heart to even think that it might be put in the same category as some of the legitimate harassment that I and other women have experienced. Harassment that was devastating and insidious.
You're right, it's not the same as your boss implying (or stating) quid pro quo, being touched against your will, or any of the other bajillion ways people can mess with each other.
Normally, if I had an employee in his situation, I'd ask him for his side once he returned. If he confirmed the incident, the reaction would be something on the range of,"you dumbass," to "you have a documented case of being a schmuck and have exposed us to legal complaints from coworkers. Re-take the mandatory two-hour California harassment training as a refresher."
Then again, I don't allow Python on my teams because Guido is insane, so I'd obviously avoid the situation completely. :-)
It's a poor decision, but if he was there "representing his company" (i.e., being paid while there) he probably tripped over a zero-tolerance policy on harassment.