Tools that don't need to be equipped in order for them to be used each have durability, which decreases every time they are used. The durability of the tools increases whenever they are upgraded. They can be broken when they reach 0 durability and drop essence which you can collect.

Broken tools can be repaired using the recycler. To find the recycler, go to the spot where the crafting machine is found and you will see it over to the left. It looks like a frog. Tap on the recycler then select the "I want to repair a tool." option.

Please note that specific resources are required to repair tools. You may need to gather them first before you are able to repair your broken tool.