
In my opinion there is no need to have your dog castrated if you don't want to. He's
your dog, not the vet's. I have two entire males who have never once gone wandering to get to a bitch in season, even when said bitch was next door!
At the moment your boy is entering adolescence, and his hormone levels are very high. By the time he is two they will have settled back down again and he will be much calmer. If you don't like to watch him humping a cuddly toy, tell him "NO!" and remove it. Don't let him have access to them. He'll get the message that it is undesired behaviour.
It is true that retained testicles have a higher-than-usual chance of becoming cancerous (due to being at a higher temperature within the body), but if that one is removed the other one is at no greater risk. Why did the breeder suggest he should be castrated?