I think context is important, and as threads like this prove, there will never be a consensus on what exactly is right/wrong/acceptable/etc. I think if we're talking about genuine nudists, especially younger men, then there probably will be times when their body reacts to the rush of fresh air when they strip, or catching sight of an attractive [subjective, of course] woman. It's how they deal with it that is important. Walking around showing it off isn't really on, but at the same time I can't really say I'd be offended if I saw a guy going about his business at a resort who just happened to be erect. It happens, life goes on, its not the end of the world. On the other hand, I would find it grossly inappropriate if he were doing it (or prolonging it) deliberately for attention or sexual thrills, for example. It's easy to theorise and generalise from behind a keyboard, but sometimes situations arise and we just have to deal with them as best we can - both from the guy's point of view and those around him. Sometimes I think we like to create drama where really there doesn't need to be any.
(Before anyone says it, obviously, if there is behaviour which is completely inappropriate, then of course it needs dealing with. Otherwise, we're all grown ups, there are bigger problems in the world than whether a new young male nudist accidentally gets erect...)
It is only natural and most people will understand that it is out of your control. They may even appreciate that you like what you see, and respond with their own non verbal communication. No need to be embarrassed, if it bothers you; turn away.
I feel stupid replying to a post written 5yrs ago, besides his erection has probably subsided by now. As it's been mentioned before it depends on the circumstances and the location. Totally agree that when it happens in public nudist areas he should make an attempt to cover up. Either roll on to his tummy or go for a swim. I remember an occasion a few years back here in the UK at the clothing optional club I belong to A new guy had turned up ( single men allowed ) and was being shown around and introduced to people that were scattered around the lawn area by a member. Everything was ok until he came to " Mary", a well developed mature lady, who liked to tease. Well very soon she had managed to get his blood flowing, and the end result was a massive erection. She said you better cover that up and save it for me later. Trying to cover it was a real problem. It really was large, the towel was hanging on it, rather than covering it. It was quite obvious what was beneath.