[Crex]

Yeah it's possible. You have to be very careful about depth of cut and placement. Bends in the right/wrong places can open up and split a carving. Most carving/modeling/stamping needs to be done on a hard surface to work the details. Then you would wet form. Normally there is still some "wet" left after tooling a small panel to be able to wet form around a knife, but a lot depends on your technique.
In some instances I have formed first to get the bends where I want them then go back and do a little tooling. However that doesn't work out well on larger panels of work.

Best bet is to do some trial and practice on scrap leather - much cheaper than ruining a whole sheath and the work that has gone into it.