Vanilla has a terrible system for mining levels, values are hardcoded and there isn't support for mining levels except for pickaxes.

To start, use the breakByTool method in FabricBlockSettings to set the block mining levels, it requires an item tag, which is provided by fabric in FabricToolTags:

settings.breakByTool(FabricToolTags.PICKAXES, 2)

Here's the list of mining levels:

0 -> Wooden / Golden Pickaxe
1 -> Stone Pickaxe
2 -> Iron Pickaxe
3 -> Diamond Pickaxe
4 -> Netherite Pickaxe

Vanilla pickaxes are effective for STONE, METAL and ANVIL.

Vanilla axes are effective for WOOD, NETHER_WOOD, PLANT, REPLACEABLE_PLANT, BAMBOO, PUMPKIN.

If you use any of these materials, the tool will break your block even if it is under the required mining level.

To avoid this, you must create your own clone of the material. Let's say you want to create a clone for Material.STONE, take a look at the code for Material.STONE:

new Material.Builder(MaterialColor.STONE).requiresTool().build()

Turn Material.Builder into FabricMaterialBuilder and you will get this:

new FabricMaterialBuilder(MaterialColor.STONE).requiresTool().build()

You will need to set requiresTool in the material of the block, therefore you will want to create a clone for your material.

Let's say you want to create a clone for Material.WOOD to make your wooden block drop only when using the correct tool, take a look at the code for Material.STONE:

new Material.Builder(MaterialColor.WOOD).burnable().build()

Turn Material.Builder into FabricMaterialBuilder and add requiresTool(), you will get this:

new FabricMaterialBuilder(MaterialColor.WOOD).burnable().requiresTool().build()

You will need to set requiresTool in the settings of the block.

You will need to add your tool into the fabric tool tags to support modded blocks.

Example of adding a pickaxe to the pickaxes tag:

File Location: /src/main/resources/data/fabric/tags/items/pickaxes.json

{
  "replace": false,
  "values": [
    "examplemod:example_pickaxe"
  ]
}