I think the handle is walnut and I think the sheath is, like many natural leather skins, showing some type of condition that was prominent prior to tanning. Much the same as barbed wire marks that will not show until after the natural leather is tanned (or dipped). If it were a case of mold from "after" the fact that....then how come the hone pocket and keeper are not showing any of the same pattern? The front piece of the main sheath appears to be the only one affected. After posting, I did go back and notice some of the same pattern on the lower half of the hone pocket. Nice package at any rate.
Best, Capt. Chris