Well this isn't a prototype, it's a tech demo.

Not only does it have a full outer covering, it also has a thick underweave layer that makes it more fleshy. It has a surprising amount of corners and pinchy bits underneath - honestly sealing it completely is probably also to protect nearby humans

As for the boobs... Well, I kinda figured humanity would wait until we had a generation of useful robots before giving them boobs, but we were always going to end up here...