Here's the thing you need to watch out for - that leather is probably chem-tanned with salts containing chromium. When it gets wet and maintains contact with most metals - steel, iron, brass, nickel silver, etc., it will start a corrosion process. It should be ok, just do not leave it in contact with the metal for extended periods of time say like when storing. Keep an eye on any contact points. Salt corrosion is much harder to "kill" than simple sheet rust, because it causes deeper pitting.
Preference would be to use a veggie tanned leather with a neatsfoot/beeswax finish.
Note for all you scroungers out there - thrift stores can be a great source for "clothing" grade leather for pouches, etc. Just check out the long leather skirts/dresses/handbags/belts lot of material on the cheap. Just remember most of these leathers are also chem tanned.