It currently only seems to work if you stand on vanilla grass.
If you have a mod which adds custom grass, like BoP, your belt won't regenerate bark pieces. The moment you step on vanilla grass again, a piece will regenerate.

I'd love it if you could add a list that we can put new blocks in to make the bark belt pay attention to.

Note to self:
This is gonna be a full api-ct-jei combo, with a new Api, Crafttweaker support and JEI plugin to show which blocks actually regens armor