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Have the S1 model, slightly shorter version, for quite a few years now. The Zytel sheath does get loose over time, as in the stopper loosens up and the blade can fall out if I shake it enough which is very dangerous. BUT there is an easy fix, I wrap a ranger band over it and it is tighter than new! The ranger band can double as a good survival accessory as well.
I also use add another ranger band on top of that and slot a mini SOG sharperner/firesteel in between. So not so bad for a zytel sheath afterall.
Yes. Strong rubber bands. I've also used bicycle tubes on my other knives.. strong stuff and last much longer through seasonal changes (i.e. cold and dryness) than regular rubber bands which tends to snap.
I've experienced similar... I ended up just moving to a leather sheath for mine.