Wow that's a big one!
Yeah, it doesn't actually hurt them. It's just a fatty deposit. It's most common in overweight pigs, and sometimes if they're put on a diet it gets a little smaller (though it won't go away - once it's there, it's there). It is usually genetic, and though it doesn't hurt them it is a disqualification from competition, at least here in the US. This is also a common problem in cavies with very round heads; cavies with longer heads and more roman noses don't seem to be affected as much because of their head shape/build. Most breeders steer clear of breeding cavies exhibiting this because of the fact that it is genetic. They make perfectly fine pets though!