Mycelium Leather is not a replacement of leather but instead a more ressource hungry way to get leather without killing cows. This ensures that killing cows still has the purpose of giving an easy way to get leather and food aswell as providing functionality to mycelium which has amost no value in vanilla minecraft.
The Spade is a new tool that can be used to harvest Mycelium Patches aswell as Grass Patches. Using the Spade (right-click) onto a grass or mycelium block gives you the corresponding patch and leaves a dirt block behind.
You can use both types of patches onto a dirt block which turns the dirt block back into the corresponding grass or mycelium block.
First the harvested Mycelium Patch has to be dried via a furnace. The furnace produces Dried Mycelium Patches which then can be pressed to Mycelium Leather with the use of the Herbarium Press.
Crafting recipe for Spade:

Crafting recipe for Herbarium Press:
