Sheaths are for carrying use, not long term storage. Some types of leather tanning uses chemicals that will attack steel. Just because you haven't seen one rusted from being stored in leather doesn't mean it can't happen. I used to see this all the time when I was doing gunsmith work. People would "store" their handguns in a leather holster and it would absolutely ruin the finish. Or store their prize shotgun in a sheepskin lined case under the bed and rust it really badly. Cases and holsters are designed for transport use only, not full time storage. You can get away with it on stainless steels but carbon steels will be damaged by some types of leather or anything that absorbs and holds moisture from a humid day.