Or is there another way that they are sheathed when not in use?
Much like Wolverine, they go into her forearm.
You can see the x-ray in the movie.
Much like Wolverine, they really don't make any sense as far as how they're controlled.
When extended, there is a sort of segmented visual element to them.
This is slightly at odds with the x-rays visible in the movie, as when retracted, they are housed in her arms in a non-collapsed position. They exit her fingertips, but retract through the fingers, hand, and wrist.