What It Actually Says
While Blake says that the girl he's singing about doesn't need makeup because the way she flips her hair makes him squirt in his pants, he concludes his entire compliment with something kinda twisted:
You don't know you're beautiful.
Oh, oh oh [that's the part where he squirts]
That's what makes you beautiful
Apparently, not knowing you're beautiful is the key to being beautiful. So confidence hurts attractiveness? That's f**ked up. Now I know what you're thinking: "No, Harry Styles is just saying that you shouldn't be c**ky. Her humility is part of what makes her beautiful." To which I say, "Incorrect, sir." Blake tells us exactly five specific things about this allegedly "beautiful" girl: The first is that she's insecure. The second is that the way she flips her hair overwhelms him, sexually, which we've already covered. Third, she looks away from him when he looks her in the eyes because (he asserts) she is shy. The fourth is that Blake wants her "desperately" (he rephrases this basic idea several times: "You light up my world," Blake says. "Your hair gets me overwhelmed," continues Blake. "I want you desperately," Blake cries, consumed by passion).
The fifth and most important thing is that her prettiness is predicated on her ignorance of it. If she becomes aware that she's sexually enticing and therefore has worth as a human being, then that worth will be immediately sucked into a hole in time and lost forever. We're dealing with a quantum beauty particle, here. This is Schrodinger's attractiveness.
For illustrative purposes, here is a sexy cat.