You're welcome Jason.
1) Lots of reasons. To round the edges after edging, to make the sheath fold better, to flatten out the fold and to stick a knife in there to get some body shape to the knife pouch area, and sanding wet is sooooo much better than sanding dry.
2) I keep it in the water till it sinks then take it out. I don't want to oversaturate things. It will dry some few minutes on the towel because I'm doing other things with the other sheaths such as trimming belt loops flush, punching slots and trimming the bottom side of pancakes flush
3) I like to get it in the oven before the color starts coming back. Not so much because of the oven but because I want to do any wet molding I'm doing before the color comes back. Otherwise where ya rub for the wet molding will be darker.
4) Body, firmness and shape after drying in the oven. It is important to condition after but I think the drying in the oven is essential. I can leave the same sheath out to dry and I don't get the same firmness or shape holding ability. I also believe that the item will dry more completely sooner from this process. My theory is that the leather starts drying from the inside out instead of from the outside in. Theory only based on absolutely nothing except thinking about it and having done this to thousands of sheaths and holsters.
Looking good on that sheath darkmatter. yeah I'd say about another 1/2" or a smidgen more deeper. Lot of that becomes perception on the customers part. If it is in deeper it looks more secure. Nice job! Like your stamping pattern. The last slit on your bloodknot could be a hair longer. Thank the strings will lay flatter and underneath each other.