It won't. At least, atl accounts of it doing such is spurious. It will cause some temporary, effects, but actual real muscle atrophy, which is practically the only thing that will cause actual permanent shrinkage, is unlikely to occur even over very very long-term wear. What's being seen is likely just inability to get fully erect or maintain such, and that ability will return over time.
Prevalant reports about shrinkage are, as far as I can tell, just a myth that arises from the desire for such to happen. It's a fantasy.
Feminizing HRT has been scientifically reported to cause permanent testicular shrinkage, so that's a factual / conformable thing. However, it's unclear, just due to a lack of research, if it causes permanent penile shrinkage. Several combinations of hormones will make it absolutely difficult to get full erections and maintain erections, though. Many people report shrinkage and I'm inclined to believe there is some level of that, but how much and to what degree and the permanency of such is up in the air.
I don't recommend HRT just to cause shrinkage because of the health risks. If you decide to do such, please exercise caution and do reading on risk factors, and consult your doctor if you can. Testosterone blockers without estrogen can cause some additional health risks.
Stay safe!