Correct me if I'm wrong, but the Tool.Equipped() event only fires when the object enters the inventory, not when the player holds the tool.
The Equipped event fires when the Humanoid equips the tool, so yes, you are wrong in that it fires when it enters their inventory.
local Tool = script.Parent Tool.Equipped:connect(function() print(Tool.Parent) end)
Will only fire when it enters their character model.