For a field knife, leather holds water, but can be made water resistant with Nikwax and the like. It forms more easily, doe's break in, and will eventually get quite flexible, like it or not. The sheath itself must be welted on any edge, and retaining straps eventually loosen or, if not properly thought out, get cut off.
Kydex retains it shape, can be molded to retain the knife, can be cut to as trim a shape if the right rivets are used, does come in colors and finishes, and can be had in laminates that look like something else. They can be much less noisy if that is a problem - but if noise was that acute, I have to ask why the American bayonet is a stiff laminate like old helmet liners. Stiffness and protection from the blade comes first, which is an advantage for Kydex.
I have a kydex sheath for my Camp Tramp with tec lock, and far prefer it to the old floppy sheaths I used carrying Gerber MK 2's, hunting knives, or large lockbacks. Leather sheathes always seem to allow the knife to rock, cut up the leather, and eventually fall out - which has happened to my hunting companions on more than one occasion. Considering most old world or eastern combat and utility blades were often carried in metal or wooden scabbards, I don't have much confidence in leather.
Leather is just an economical substitute for a proper sheath.