There are three options when you want to break the chain on an item:
You can merge with an unlocked item. If you merge the chained item, you will break the chain and increase the item level.
You can use your gold to unchain the items. Just tap on the item and then the unlock button at the upper right corner of your game board.
You can use your max-level Chain Breaker to unlock the items. Merge your max-level Chain Breaker with a chained item. This way, you can break the chain on the item and set it free.