The two sheaths I ordered also have this issue. They are a lot bigger than I anticipated too.

You can slightly adjust the tension by loosing the top screw but even if I take the top screw out it is too tight.

Oh and these sheaths just hold onto the top of the grip. Mine touches the blade very little.

I did the hair dryer adjustment on mine. Got it nice and warmed up and then pulle dthe blade out slightly so the top of the handle was slightly prying open the tight area. I left it in place to cool. Now it requires a slight pressing of the thumb to unsheath it. Now the blade portion rattles around slightly. I am going to wrap the blade in tape, heat it up and put a small clamp on it to cool. Hopefully that does the trick. And yeah. The sheath is wicked long. I think I'll cut it down and drill a new hole or two for the screws.

My Kydex one from the yard just came today. I won't get a chance to try it until tonight. May have to order leather for my Yardkeeper if I have the same problem.