To re-create:
Install the attached data pack. The pack adds “minecraft:oak_log”, “minecraft:sand”, and “minecraft:hay_block” to the “minecraft:needs_iron_tool” tag.
Use a wooden, stone, or copper axe to break an oak log. The block drops like normal despite the tool tier being too low.
Use a wooden, stone, or copper shovel to break sand. The block drops like normal despite the tool tier being too low.
Use a wooden, stone, or copper hoe to break a hay block. The block drops like normal despite the tool tier being too low.
The expected behavior is that these three blocks should not drop their items unless broken with the appropriate tool type and of iron tier or higher.
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duplicates 1
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We're tracking this issue in MC-270468, so this ticket is being resolved and linked as a duplicate.
That ticket has already been resolved as invalid. Please take a look at the parent ticket (MC-270468) and see if an explanation is provided there in the description of the ticket or in the comments for why this issue is invalid.
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Which blocks require the correct tool to be used in order to drop is hardcoded and not controlled by tags or components at this time.
These tags (and components) merely control whether a particular item is the correct tool.