Often used regarding weapons from historical or fantasy contexts like 'swords' or 'daggers'. Knights would sheathe their swords upon returning to the castle.
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Metaphorical Use
Can be used figuratively to imply putting away strong emotions or thoughts. After the heated debate, she had to sheathe her anger.
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End of Conflict
Symbolizes the end of a conflict or readiness to make peace. With the battle over, the warrior sheathed his blade.