Leather tends to be more comfortable to wear especially in larger blade sizes because it has some "give". Leather is also the most pleasing to look at and it can be customized to your whims.

However, for any harsh environment involving serious rain or an environment involving lots of sand/grit/dirt/blood then I prefer Kydex.

I see the Muk as a great hunting knife/skinner so I would be biased to choose Kydex just because it's easier to clean. Leather would obviously work too but you need to be conscientious about cleaning the blade before sheathing it.