After paying $500, and waiting 5 yrs, it is easy to be disappointed...after all, these are Randall Made Knives - they must be awesome because everybody wants them and they take forever to get. The unboxing of my purchase around 15 yrs ago was somewhat anticlimactic - I don't know what I was expecting, really; but there was no fanfare, no magical glow emanating from the box as I opened it. Just two knives that, over the course of waiting nearly twice as long as projected, I'd nearly forgotten about.
I can understand the disappointment of seeing the leather marred, especially since you paid extra for it. You've been offered a replacement - but that will mean shipping the knife back, because the sheaths are made to fit the individual knives. (They "could" send you a generically made sheath; but then you might be unhappy with the fit, and they wouldn't want to hear your complaints because you already knew the risk) It is somewhat unclear from what you posted, but I'm guessing that they aren't covering shipping either way on the exchange because they feel the sheath you received is within their tolerances. Is that correct? If so, only you can say whether it's worthwhile. If it's going to be a user, the sheath is going to get marks on it eventually anyway...and they'll be on the front, but those will be "YOUR" marks.