Continuity mistake: When Dean is speaking to Sam, who is now Lucifer, he starts crying. Tears are physically on his face but in the next shot the tears are gone.
Continuity mistake: Gary (disguised as Sam) sits at the bar and orders a banana daiquiri. The woman next to him tries to engage him in a conversation as he sips his drink, and each time the camera switches between him and the woman, the level of his drink changes noticeably up and down.
Answer: Angels themselves may not have genitalia, but their vessels do. Nephilim occur when an angel in a vessel reproduces.
Greg Dwyer