If my cutting out job isn’t as smooth as I want it to be, I will lightly sand the edges on a 220 grit belt on my belt grinder to true them up. As is shown in this image, I also like to chamfer or round over the corners of the leather (both front and back sides) to give it a more finished appearance.
This chamfering can be done with a special leather working tool, but I like to do it quickly on the grinder. If you are using a belt grinder for this operation, if you wet the edges of the leather before sanding on them, this will help the finish to come out smoother and with less burning. This edge smoothing and chamfering can also be done by hand with some fine sandpaper.
Don’t bother at this time with the edges that will be along the main seam of the sheath, as these will get cleaned up later, after the seam is glued together.