Let's keep it simple. "Tool" is simply a re-Anglicization of the Yiddish slang "Putz" which means the same as the original American slang term "Dick" in both its direct literal and anatomical meanings and its indirect figurative ones. Any context where "Tool" works, the term "Putz" or "Dick" could be substituted. But if you did that, people would know you're a total tool.
LITERAL: "My tool feels like it's ready fall off after partying with Amber last nite."
FIGURUATIVE: "Don't invite Brett. He's such a tool. He's so fake and a jagoff loudmouth."
By Gr8WyteDope