I've had the same thing, as well as several variations on the same. It's a type of cyst. Doctors who are not long distance cyclists know nothing about them. Been there, done that. Fortunately, I now have a doctor who is a long distance cyclist. I did a 153 mile 10,000' ride with him last year as I was recovering from a saddle sore he was treating.
It's basically a type of skin infection but it's under the derma. He said it could be bacterial or fungal or a combination.
So what to do? First thing to look at is: is it possible to find a saddle that doesn't touch your body where the cyst is? Because it's pressure that creates them. I guess it damages the skin, stuff gets in, your body fights the stuff, but since the pressure keeps occurring the cyst doesn't go away.
Second, fight the immediate infection. You know how pros keep getting dinged for steriods and then say, "The doctor prescribed a steroid cream for my saddle sore." Yeah, so the steroid cream you want is fluocinonide, but you shouldn't use it for more than 2 weeks because it can make your skin thin. For the infection, he prescribed the antibiotic mupirocin. I smeared them both on a few times a day and before and after a ride. That worked great. It's good to know what you want before you go see a doctor.
Third, prevent reinfection. My practice is to shower with a dandruff shampoo. I use Selsun Blue, putting it on my crotch first, then turning off the water, doing the rest of me, then turning the water back on, so that it sits there for a while. I also put on Tea Tree Oil every morning and before and after a ride, just little dabs on my finger.
https://www.amazon.com/Tea-Tree-LARG...00PHVXIQA?th=1
I also put some Bag Balm on my butt or chamois before a ride, but that really doesn't help the cyst problem because that's a pressure problem more than a friction problem. Different saddle is the long term solution here.