Hi rcheung2! This is intended behavior in skyblock. It is not intended behavior in the towny world, which is why it got fixed. Villager item pickup is disabled in skyblock to prevent an exploit. You can breed villagers without feeding them however!
A pair of villagers have a variable chance to breed if they can detect at least 9 valid doors, when they are traded with. It?s a 100% chance the first time, and I think a 20% chance after that.
Good luck!