Can פשוט always act as both an adjective and an adverb?
Yep. Just like einfach in German.
It can be an adjective - סיפור פשוט - but I think it's not really an adverb here. It's doesn't modify the verb מבינה. I think it's more of a qualifier? Not sure of the exact terminology.
In the correct english translation it's an adverb:
Translation: You simply don't understand.
Then is it the negation of "you understand simply"? I'm not sure, I'm not a native English speaker. And also maybe I my terminology is confused.
עזבי, סתם סתומה...
I don't understand why the statement "you simply are not understanding." was rejected.
“Don’t understand” means that you are in a state of not understanding.
In “are not understanding”, understanding can mean an adjective...“You’re not very understanding, it seems like you don’t care about my problems.”