I thought the same - that the interwoven leather is folded and glued together like how it is on the classic flap straps.yea the part that fell off is leather... but the white part that exposed the peeled leather does feels like fabric.
I always had this impression the leather used for the chains was leather glued together? But from this bag, it doesn't seem to be.
It really sucks they're making you and others with this issue pay for the replacement straps. I get it's wear and tear but I think it's cuz they didn't use good quality leather or it's a combination of leather and fabric. I hope they take this feedback and make the straps on new bags better so this won't happen for others.