Hey Doc,
I do form it with the cutting edge to the open on the kydex but I form it further up on the handle so the handle shape actually holds the kydex in place. It is impossible for the blade to move to the open end of the fold. I apply a couple layers of masking tape on both sides of the blade before I form it to add a few thousands of an inch on both sides of the blade. There is actually little to no blade contact in the sheath.
I formed it just like in this photo.
I use a pretty stiff foam to get good definition and keep the knife cool so it cools the kydex rather fast.
I formed the kydex first and sanded it to the shape I wanted then wet formed the leather to the intire shape of the kydex, that way I could see where to trim the leather at the cutting edgte part of the sheath. Once the leather was dry I I wrapped the kydex with it and glued it in place then trimmed it to the kydex. Then, just used a stitch groover and stich marker and started the stitch line where I could feel it holding the knife really well. I drilled the holes with a drill one size bigger than my needles. So the stiching does set the retention tightness but doesn't really hold the knife in the sheath. I then fit the belt loop and used the sheath holes to align the belt loop. Beveled and burnished the corners and used black "edge kote" to paint the edges to match the kydex.
I can see on your knives, just coming up the handle a little will really help lock your knife into place but it will scuff your handle over time. It's all give and take.
I thought the kydex edges might be hard on the thread but the leather actually holds the thread off of the kydex holes.
This knife will see extreme use and every day carry on a ranch so I hope to give a report after several months of hard horse duty.
Todd