They may be correct with respect to grammar, but I find sentence one to be awkward and cannot think of a context where it would be natural.
1. Even though it is that simple, they keep doing it over and over again.
Also I suppose in this case "that" means "very" or "so" but the sentence would be more clear without the use of "that". Without knowing what "it" is the sentence implies that it is not right for some reason.
Even though it is very simple, they keep doing it over and over again.
If we give the first "it" some meaning, it does not help clarify the sentence.
Even though the work is very simple, they keep doing it over and over again. (I have to ask myself, "what is the problem here?")
The above sentence makes no sense to me. Why would you change what they are doing if the work, simple as it is, is being done properly? It would be different if the sentence was constructed this way.
Even though the work is very simple, they keep failing over and over again.
Now the sentence makes sense. The simple task is not being done properly and they are not correcting the mistake.
The second sentence is better except I do not like the use of the word "that" and would replace it with "very" or "so". I will continue to replace the first "it" with " the work"
2. Yet even though the work is very simple, they didn't do it at all.
This does make sense. Here you would be describing the people as being lazy or at least showing the simple task was beneath their dignity.
I would use "that" in a sentence like this if I were angry or frustrated with the workers.
The work is THAT simple! Still they keep failing over and over again.
