In the search for new superhard materials using machine learning, we recently prepared the high hardness, ultraincompressible compound, Mo2BC. This compound is not only extremely hard but according to the calculated bulk and shear moduli ratio (G/B) it is also ductile, which is contrary to most superhard materials like diamond or ReB2. Mo2BC crystalizes in a highly anisotropic, pseudo-layered orthorhombic crystal structure containing alternating layers of boron and carbon rich planes. The complexity of this compound and its exceptional mechanical properties motivated an in-depth examination of the structure-property relationship using density functional theory. Calculating the tensile and shear stress-strain behavior to probe the ideal strength of the crystal structure reveals an unusual strain-stiffening due to the formation of pseudo-gaps with a remarkable bond-breaking and concurrent bond-formation mechanism that is not present in a typical hard material. The understanding gained by studying the electronic structure as a function of strain explains the unique coexistence of high hardness and ductility in Mo2BC. These results provide a new perspective on the design of future mechanical materials by contrasting the notion of avoiding materials with pseudo-layered structures.