It's not automatic, nor is it mutilation. If the kids penis was rendered "unusable" for either urination or future procreation, then the term mutilation would apply. A properly performed circumcision does not affect the function of the penis, keeps things more hygienic, actually makes the owner slightly less vulnerable to contracting bacteria via sex, rules out phimosis and the admittedly rare penile cancer.
I'm tired of hearing the 'well take a shower!' retort. Most women will tell you that is in fact not the miracle cure all for the troublesome upkeep of a moist orifice. I'm not saying uncircumcised men basically have vaginas, but they are susceptible to contracting yeast infections from their partners.
When a young girl in sub-Saharan Africa gets her clit snipped off with a pair of scissors, that's mutilation. It serves no other purpose but to reassure her future pissant husband that by feeling little enjoyment from the act of sex, she'll not be tempted to look for action elsewhere. Huge difference from a male having a circumcision which is essentially cosmetic, and doesn't interfere with recreational sex or procreation. So it's easier to wank off with an anteater. Um, great? Given how many females I've heard opine on the subject, that probably comes in handy (no pun intended).
Regarding the OP, this sounds like an unfortunate mistake on the part of the hospital, and about some parents looking to cash in on a firebrand issue. Funny that they maintain it's irreversible, I just saw a bizarre looking device online awhile ago that does exactly that, reverses circumcisions.