Major issue on multiplay servers :

• When removing bits from multiple blocks in the world with the smart chisel,
  and your inventory is full, dumps all those bits as entities in the world (10000's of them).
  No server can handle this amount of entities, and it crashes the server.

  Proposed solution :

  • When inventory is full, and a chisel action creates a number of entities greater then a certain value,
    destroy the bit (or don't create it) instead of making an entity

looks like i made a dupe of #89. Closing