All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and messenger.
This Hadeeth is authentic and Muslim presented it in his Saheeh. However, it does not serve as evidence that circumcision is obligatory. Al-Mubaarakfoori said in Tuhfat Al-Ahwathi: "The circumcised part is the place of circumcision of the penis of the man and the vagina of the woman, and it is a general meaning which does not necessarily mean that the organ is circumcised."
What is meant by ‘when both the circumcised parts meet’ is sexual intercourse, which is when the top of the male penis disappears inside the female vagina."
For more information, please refer to Fataawa 81776 and 82042.
Allaah Knows best.