I have figured out what is going on, I think.
If you use a uri to specify an item it will find the icon.
However, if you use a tag if will only find the icon if the material is located in stonehearth.smod.
So
"uri" : "colors-base:thread_blue",
and
"material" : "wood resource",
will display an icon, but
"material" : "blue thread resource",
will not, because the icon is not a vanilla item.