You can revert dragon pickaxes with the ornament kit/zalcano shard, but not one combined with a smouldering stone. (This applies to the harpoon/axe as well.)
I highly suggest being able to revert infernal tools back to their dragon variations (losing the smouldering stone in the process) or allowing players to upgrade their infernal tools into crystal variations.
Its supposed to be an item sink. It's not much of an item sink when you're able to recharge your Inferno Axe with a Dragon Axe, only costing 40k. Inferno Axe/Pickaxe/Harpoon should be only able to be recharged with a Smouldering stone.