How does item durability work?
A pickaxe remains the same strength until it reaches 0 durability, at which point it does not break entirely, but instead reduces the strength to even lower than the matter manipulator. It can be repaired at any time by right clicking on it while holding any of the ores used to make pickaxes/drills (copper, silver, gold, platinum, or diamond*).
*Due to a suspected bug, when using diamond to repair, you must use a full diamond instead of diamond ore.