syntactic analysis - What does this long sentence mean? The part "..believing, that is, that ...."

What does this long sentence mean? I am confused in the parts-

Part 1: " believing, that is, that..." and

Part 2: "in terms of good and evil, confusing human issues with matters that do not relate to us"

"Both insisted on rejecting Democritus’s naturalistic explanations in favour of trying to understand the world in finalistic terms – believing, that is, that everything that happens has a purpose, a way of thinking that would reveal itself to be very misleading for understanding the ways of nature – or, in terms of good and evil, confusing human issues with matters that do not relate to us."

Answer

The purpose of "that is" in Part 1 is to further clarify the previous clause. The writer wanted to add clarity to what the subjects believed; "[the subjects] insisted [something] in favor of [something else]" is then expanded upon by saying essentially, "in other words the subjects believed [yet another thing]".

The phrase "confusing human issues with matters that do not relate to us" in Part 2 is an alternate perspective which is juxtaposed with the earlier statement, "[the belief that] everything that happens has a purpose, [and furthermore] a way of thinking that would reveal itself to be very misleading for understanding the ways of nature." The phrase "in terms of good and evil" is used to give context to the alternate perspective.