# ToolSense: A Diagnostic Framework for Auditing Parametric Tool Knowledge in LLMs

arXiv: https://arxiv.org/abs/2606.12451 · HTML: https://mlsanity.com/paper/2606.12451/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 20 of its 43 references that are in the map.
- First posted on arXiv 4 Jun 2026.

## Builds on (most cited first, 20 of 20)

- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [Measuring Massive Multitask Language Understanding](https://mlsanity.com/paper/2009.03300/) (2020)
- [Toolformer: Language Models Can Teach Themselves to Use Tools](https://mlsanity.com/paper/2302.04761/) (2023)
- [Prefix-Tuning: Optimizing Continuous Prompts for Generation](https://mlsanity.com/paper/2101.00190/) (2021)
- [Dense Passage Retrieval for Open-Domain Question Answering](https://mlsanity.com/paper/2004.04906/) (2020)
- [The Power of Scale for Parameter-Efficient Prompt Tuning](https://mlsanity.com/paper/2104.08691/) (2021)
- [Locating and Editing Factual Associations in GPT](https://mlsanity.com/paper/2202.05262/) (2022)
- [ToolLLM: Facilitating Large Language Models to Master 16000+ Real-world APIs](https://mlsanity.com/paper/2307.16789/) (2023)
- [Language Models as Knowledge Bases?](https://mlsanity.com/paper/1909.01066/) (2019)
- [Gorilla: Large Language Model Connected with Massive APIs](https://mlsanity.com/paper/2305.15334/) (2023)
- [BERT Rediscovers the Classical NLP Pipeline](https://mlsanity.com/paper/1905.05950/) (2019)
- [How Contextual are Contextualized Word Representations? Comparing the Geometry of BERT, ELMo, and GPT-2 Embeddings](https://mlsanity.com/paper/1909.00512/) (2019)
- [Autoregressive Entity Retrieval](https://mlsanity.com/paper/2010.00904/) (2020)
- [LoRA Learns Less and Forgets Less](https://mlsanity.com/paper/2405.09673/) (2024)
- [Representation Degeneration Problem in Training Natural Language Generation Models](https://mlsanity.com/paper/1907.12009/) (2019)
- [Transformer Memory as a Differentiable Search Index](https://mlsanity.com/paper/2202.06991/) (2022)
- [All Bark and No Bite: Rogue Dimensions in Transformer Language Models Obscure Representational Quality](https://mlsanity.com/paper/2109.04404/) (2021)
- [A Neural Corpus Indexer for Document Retrieval](https://mlsanity.com/paper/2206.02743/) (2022)
- [ToolGen: Unified Tool Retrieval and Calling via Generation](https://mlsanity.com/paper/2410.03439/) (2024)

## Abstract (arXiv)

Large language models deployed as agents over large tool catalogs face a critical tool-retrieval bottleneck. As embedding-based retrieval approaches rely on compact encoders that may under-capture specialized tool semantics, parametric tool retrieval addresses this by encoding each tool as a virtual token appended to the LLM vocabulary, fine-tuned in two stages (memorization then retrieval SFT) to use the LLM as a retriever, achieving strong performance on standard ToolBench retrieval benchmarks. Yet these benchmarks use verbose, fully-specified queries, and their evaluation applies constrained decoding that restricts outputs to valid token paths, neither reveals whether the model actually understands its tools. We introduce ToolSense, an open-source LLM-powered diagnostic framework that takes any tool catalog as input and automatically generates three benchmarks: a Realistic Retrieval Benchmark (RRB) with queries at three ambiguity tiers, an MCQ probing benchmark, and a QA probing benchmark. Applying ToolSense to ToolBench (~47k tools) and evaluating five parametric model training configurations reveals a knowledge-retrieval dissociation: on RRB queries, several configurations collapse by ~50-64 percentage points compared to fully-specified ToolBench benchmarks, falling below the embedding-model baseline. Additionally, despite strong retrieval performance, some models score near-random on factual probes, suggesting a knowledge-retrieval dissociation. We open-source the ToolSense framework and the ToolBench diagnostic benchmarks at https://github.com/SAP/toolsense.