Wow what a wonderful firearm and holster!!! First question are you going to use it or fix it just for show?
Some choices, keep it a collectable which means don't mess with it or you will ruin any collectors value. Or repair to use it. That being said you can also copy the pattern without damaging it and build a complete new one or you can repair the flap and enjoy it as is.
Here's is the deal with collectability, its damaged so its not pristine so its not as "collectable" as one that is pristine but it is still over 100 yrs old. What will you lose by repairing it compared to building a new one and saving this one.
If you do repair it so you can carry it also have the holster loop replaced as it is very important to have good leather there and your holster is over 100 years old so there may be some issues such as dry rot. it could be that rot will make your leather tear at the old stitch line when you try to re-sew it there, something to think about.
Personally i would build, or have one made, a whole new copy and leave that old leather just like it is or you are going to end up with a modified holster that is still over 100 years old so no collectors value and not good leather either.