I updated to 1.2.9 and then started to get into Occultism. After making the Otherworld Goggles, it changes the screen so you can see the Otherwood however when you go to cut it down, it drops normal oak logs. Seems like the only way to get the Otherwood atm is by eating the demon's fruit.

I try the goggles in both the curios slot and in the helm slot on the player but it did not resolve anything.