The way this would likely have to be implemented is by a comparison with the "clean worlds". Effectively, we have untainted versions of all the worlds running in the background, and when Loka needs to do a hard regenerate of an area, it merely asks the clean world "Hey, what block is x,y,z on world supposed to be?" Then it just sets that block.
Conceivably, the "Woodcutter" would work by verifying each log block that would be affected against the clean worlds and then only exploding them if they are in fact logs on that world. This would, however, cause issues anywhere a log exists with the same data and position on both worlds. This wouldn't likely be a large quantity of blocks, but it's the only real way it would probably have to work.
I would say these things should be really expensive...