They highlight where there are extraneous objects on one's body, but they do not reveal what's underneath your clothes. The OP that I responded to explicitly states s/he would be fine with TSA agents ruffling through your most recent messages on your phone, and that it should be OK for them to see nude photos of yourself that you may have just sent someone.

There's a big difference between going, "Hey, the computer put a red square on the left thigh of a generic outline of a human, it suggests we should look there to see if you have anything," and, "Hmm, let's see what Johnny sent Sally yesterday. Oh look, his dick! And this lady who isn't even traveling with him sent him six pictures of her breasts!"

Also they supposedly black out sensitive areas.