This puzzles me. I have Estwing hatchets which spend nearly all of their days in leather sheaths. They are years old, at least twenty or so - no rust.
i also have a Buck 105, purchased in 1972, also kept sheathed in leather, (it is on its second sheath, as a matter of fact) no rust or corrosion.
Same here. My Estwing axe had no rust issue, but all of my Snow & Nealley axes started to rust. I assume it's a difference in steel.
I used WD40 and very fine sandpaper to remove the rust (didn't have Scotchbrite pads). Still a few dark spots, but happy it wasn't worse.