Treating the sheath can prevent moisture from penetrating the leather, but can also hold moisture against the blade longer since the leather can't breathe. So, it cuts both ways (sorry!).
Some treatments will soften the leather more than others. Silicone or sno-seal shouldn't affect the leather's stiffness (and so its strength in keeping the edge of the blade from coming through. Other oil treatments will make the leather softer and more supple, which is great for a baseball glove but maybe less so for a sheath.
For a blade that's more susceptible to corrosion, it's best to wipe the blade itself with some light mineral oil before storage.
I suppose you could use silicone/sno-seal on the exterior for moisture shedding, and wipe the interior with oil of some sort for corrosion resistance.
If you have some scraps, you could experiment and see what seems to work best.
Edited by dougwalkabout (09/23/16 08:45 PM)
Edit Reason: typo