Let's look a little closer.
How about this -- thousands of little naked dolls with genitalia and without arms?
There's a simple answer. The figurines were created as a small-scale version of the terracotta warriors. Originally they had movable wooden arms and were clothed, but over time the arms and cloth rotted away leaving only the ceramic figures.
Here's a reconstruction of how the figures might have originally looked.
There was much more to see at the tombs, but we were on a short schedule. We had to get to the airport because our next stop was hundreds of miles away.