Tools and armor can be upgraded with Augments! Some Augments include Wither Resistance, Absorption, Speed, Jump Boost etc.
The Tinkering Table is used to add/remove Augments to your essence gear. The types of tool/armor that an Augment can be applied to are listed in the tooltip of the Augment.
Each augment has a tier. This tier is the minimum tier of gear that the Augment can be applied to. You can apply lower tier Augments to higher tier gear.
Each piece of gear can only have a certain amount of Augment slots.