It's a high-quality mask/sheath. The axe cut through it for a couple of reasons. Mostly, the axe was free in the box because the pop-up cardboard restraining tab had been flattened. There is no glue, just stitching with a welt. There are rivets at the corners, but the bit can slide between them. I'd guess that the bit worked its way between the welt and one of the sides. It wouldn't take much of a jostle for that sharp bit to cut through the threads.
I've put a couple more rivets in the sheath so the bit can't reach the threads, and even if it did, it couldn't cut its way free.
A couple years ago, I bought a Gransfors Bruks trade tomahawk that was extremely sharp. It doesn't come with a factory sheath, but the seller had made one, using leather and leather stitching. During shipping, the axe cut through the sheath, through the leather lacing, through the packing, through the box and fell out on the floor at a Post Office sorting facility. The Post Office mummified it with packing tape, and that's how it got to me.
I've put a couple more rivets in the sheath so the bit can't reach the threads, and even if it did, it couldn't cut its way free.
A couple years ago, I bought a Gransfors Bruks trade tomahawk that was extremely sharp. It doesn't come with a factory sheath, but the seller had made one, using leather and leather stitching. During shipping, the axe cut through the sheath, through the leather lacing, through the packing, through the box and fell out on the floor at a Post Office sorting facility. The Post Office mummified it with packing tape, and that's how it got to me.