Cannot make any steel item because there is no steel? Do I need a seperate mod?

there is stilll currently an issue where steel lockpick recipe crafts an iron lockpick though.

Yes, you need a separate mod (and it is not a bug). Any mod that registers its steel ingots under Forge tag forge:ingots/steel and steel nuggets under forge:nuggets/steel will work with Locks mod out of the box. Others can be customized with data packs.