I was asked about this the other day:
I do not have a definitive answer to this but I think it highly unlikely that people would line the inside of their saya (sheath) to let them sharpen the sword every time they draw it. It's one of those movie ideas: cool in theory, terrible in practice.
Sharpening a sword is not a something you can just run once quickly across the nagasa (length of the open blade) to get any significant benefit.
Here's what you'd need:
- Sayas are not tightly form fitted. There is always some room needed to slide the sword in more easily, even if a few milimeters apart. If they were tightly fitted, then you'd likely slice up the inside of the saya every time you nukito. However, when sharpening, the stone has to be rubbed against the blade at uniform pressure and evenly.
- You need to use different types of sharpening stones to get a good sharpening. Each stone works on fixing a different degree (based on the grit). A sword in combat takes different levels of damage (big chips, little scratches). It doesn't help to uniformly sharpen the full edge with one stone until you've worked out the big ones first, then progressively worked down with different stones to the smaller chips.
- Sharpening stones almost all work only when wet (soak minimum of 15 minutes), but you do not want a wet stone sitting against a sword most of the time (causes corrosion) inside a sheath.
Essentially, having a sharpening stone inside the sheath will either be ineffective or actually damaging to the blade. Unless someone can explain how it could be done, let's dispense with that myth right now.