Blocks disappear after mining

I have my game in 

What I expected to happen was...:
Once breaking down a block of regular stone with wooden pickaxe (in survival mode), the item should minimize into a small block for me to pick it up and it goes into my inventory. 

What actually happened was...:
Once breaking down the block it breaks down but it disappears and there is not option to pick it up.

Steps to Reproduce:
1. Attempt to break stone 
2. Block breaks down
3. Item no where to be found