Not strange at all. A number of complete cased sets in as good or better condition have holsters that look pretty much like a brown rag. The holsters were made of a thin patent leather that did not hold up well, particularly if it was exposed to gun oil and/or not well cared for. Borchardt holsters are scarce and it is very rare to find an original Borchart holster in excellent condtion.
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If it's made after 1918...it's a reproduction
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