I have an existing wool farm 🐑 (dispensers+shears), and I thought: 💡 "Hey, I can make some hook knives and add them to the dispensers to get some string alongside the wool!"

Unfortunately, when I did that, the hook knives just got dispensed, not used as the shears are. 😢

🤔 I am guessing the item needs some additional tags or properties so dispensers can treat them like shears.

MC 1.19.2 (Fabric), mod version 1.3.19

Nope. That is by intent. The tools are designed for farming.