This system is similar to Fortnite: Battle Royale Chapter 2 Season 6 / LEGO Fortnite / Save the World’s world resource harvesting. Only when an object is destroyed with your Pickaxe do you receive the crafting materials, not while harvesting it.
With this, if you keep Override Resources set to Off, and the suggested setting to On, props will act like normal but will drop a desired number of fed resources when destroyed.