Why is the mallet missing from crafting and why does it appear automatically?

The mallet is no longer a craftable item - that is why you cannot find it in the crafting menu.

It is now built into the building system and appears automatically in your character's hands when you tap the Build button in the HUD.

You do not need to craft, find, or carry it in your inventory.

The mallet is used for placing new structures, upgrading them to higher tiers, repairing damaged pieces, and demolishing recently placed objects.