They used to censor nipples too, and then at some point they just didn't. I guess the Japanese government relaxed their guidelines a bit - after all, they've now recognized that manga and anime are effectively their Hollywood, and are very busy promoting them around the globe. I expect at some point they will quietly drop prosecutions of uncensored drawings altogether.

you don't need to even go as deep as hentai, you see it in anime (Ghost in the Shell is one prominent example)... it's fairly common to see nipples and a complete lack of genitalia