I added chisel and bits 1.18.2 fabric to the Better MC [Fabric] 1.18.2 modpack and the world loaded just fine but I could not use or place blocks or any other item I tried. Everything else worked fine I could move, break blocks, I even created micro blocks with the chisel. Additionally I verfied it was not my mouse as I opened my inventory and was able to split a stack of blocks with right click, so it seems to have only been blocked when interacting with the world. Lastly I closed the game removed chisel and bits and rebooted and everything ran fine.

I must assume that there is some conflicting mod at play.

Could you check if it works with just chisels and bits plus the fabric API?