If you try to exchange a block that doesn't drop itself, like Grass or Stone, it will drop the block as if it were mined by a tool. You can enchant the Exchanging Gadget with Silk Touch and it will drop itself.
The Exchanging Gadget
The Exchanging Gadget replaces blocks in patterns similar to the Building Gadget. Sneak right click on the block you want to replace to, set the mode and range, and then right click to replace.
