I use to work in survival equipment in the AF for 8 years (active duty 88-96). Camillus, although they still make the pilot's knife, have not supplied it since the early 80's to the military, ontario has. Of course the camillus ones, were around for quite a time afterword. Then usually, like other surplus, eventually auctioned off the the highest bidder at the fed. auctions.
The handles come dry, the sheaths are plain dried leather also. We would soak them in neats foot oil for a few days and pull them out and wipe excess oil and let them dry out (as much as possible). This was usually done on an individaul basis though. It was never written that the knife handles, or sheath (of the pilot's surv. knife) were to be treated. As far as procedures, they are usually "deviated" from. The only knife handles and sheaths that were treated with the "anti-jungle rot" dressing, were the F/U's and that was started in the 60's (to the present).
Some would also dip the handle in a hot can of beeswax, some used parafin, to help treat them. In my own experience. neats foot oil works well on the handles, and most any leather conditoner works well on the sheath. neats foots on the sheath tends to make it to "bendable", "pliable", etc.
As far as snaps coming off, you can go to most any home depot, or fabric store and buy a snap and stud kit and replace them yourself, all you need is a pair of pliers and a small hammer. We would replace the snaps with the same regular, standard size snaps you find in the store (which tend to be a little bigger than the ones that come on the knife sheaths, but they work fine).
As far as knives being stuck in a warehouse, it happens all the time. the military has always been known to stock pile and "forget about it".
They were still issueing mark 2's from ww2 in Korea and some in vietnam!!!
I rememeber issueing old ww2 metal utility folders in survival kits in the late 80's and 90's!!! As long as it works its used, unless, its broken, rusted beyond repair, obsolete, or its been held up in a warehouse and someone wanted to order the "new toys" from the NSN catalogue instead of using the old. Than it eventually makes into the fed. auction after its been forgotten and "obsolete".
And in case anyone is wondering, the saw back is for cutting through aircraft aluminum, i.e. the cockpit area in an emergency, not for sawing wood.