simple answer = often they don't use them in places where rivets should be used. the strength and your perfect example shows this, rivets are best used for shear loads, loads perpendicular to the axis of the shaft, like you showed pulling on the shaft of the rivet. when folks use them in an area where the pressure of the load is on the head then the head pulls off or the leather stretches around the head and gives way. To me most folks are just ignorant about the technical aspect of fastening systems and don't realize they play out even in the smallest places like the leather world