This is intended. Increases tool effectiveness, while lowering durability 25%.
single player w/ 1x harvest rate, Advanced tool kit upgrade used on tools.
Obsidian pick w/o tool kit = 9 items per hit
Obsidian pick w/ tool kit = 12 items per hit
Yep, exactly this. Don’t worry though, it’s always best to use tool upgrades. The additional resources more than makes up for the increased rate at which you need to repair.
Tool upgrades give +1 to gathered resources per tier.
This effectively increases the tier of your tool.
For example, Steel tools get +1 over Iron, Hardened Steel gets +2 over iron, etc.
So an iron pick with an advanced tool upgrade will gather resources just as well as an un-upgraded Star Metal pick. Both will gather 7-8 stone per strike.