Re: "Digging in the Dirt" quest in the Barrow Downs
You do not equip it. You quick slot it. When you are standing in the correct place. You mouse click on the quick slot. Or hit the key assigned for that quick slot.
I suppose you could open your bag. Double click the pick to use. Or select the pick and hit "U" to use.
You will eventually see this quest dynamic used time and time again. You get an item that goes in your pack. You have to USE it when you are in the right place.
A few of the newer quests will hold the item in your quest log. You see a white glowing indicator on the ground. You have to use the thing on the ground.
Unless stated otherwise, all content in this post is My Personal Opinion.