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That is a good question.
A one time application, IME, would not rot the leather. But, repeated use of heavy oil application, would, based on what I've read, destroy the leather.

Use of oil...

That is important. Over use of oil will cause the leather to rot from the inside out.

It is not the blade but the leather that suffers from over use of oil.

+1

Here is a pretty good article on leather maintenance. My cobbler gave it to me.

Leather Preservation for new leather