Any hardware store should have glue suitable for the job... usually says on the tube if ok for leather. Any wood type glue should work ok.
As for slicing through the sheath I have not heard of that being an issue. In my style of folded leather sheath the blunt edge rides against the fold and the sharp edge runs against the middle insert but the tip doesn't extend down far enough to contact inside of sheath. The sheath is also wet molded around the base of the handle and if done correctly is what you could call skin tight. When the leather has dried it becomes a hard sloid shape that stays that way . As you can see in the first photo even with the knife out the sheath still retsins its shape... you can't even squeeze it flat. If you notice the sheath bulge is exactly the same shape as the knife handle and the second photo shows this from the front. That prevents the blade going any deeper into the sheath. The third photo is the inside of sheath opening showing the open moulding around the handle and the narrow slot the blade slides into. There's no way that's going any deeper into that sheath as the handle prevents that happening. You can also see in that shot how the handle molding wraps around the base of the handle. As the knife is slipped into the sheath the finger guard forces the handle wrap apart then drops into the sheath which then closes over it and locks the knife in place. For that reason some do not like that because it usually takes two hands to draw the knife as you need to hold the sheath when you pull the knife out. It can also be tricky getting the angles and shape right when you make it so it opens up when you push knife in.
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