If the meaning were "make", you would expect a direct object. "Così" is an adverb, and we normally would not say "He makes well". Rather, we would say "He makes IT well". However, we would say, "He DOES well". So "does" rather than "makes" is the correct English translation for this.
(Btw, in case anyone wonders, it's the singular "does" instead of the plural "do" because the plural subject "tutte" translates into English as the singular "everyone" or "everybody", which therefore require a singular conjugation in the verb.)
I translated "They all act that way" to be told that it is wrong and the translation given was "They all do that way." which of course is grammatically incorrect.. Cosi is an adverb and should be translated into English as "thus" or, more colloquially as "that way". It should not in English be translated as an object pronoun.
Are you seeing English to Italian? Because if you aren't, your point is pointless. At the top of my page, I'm given tutte fanno così; that is the question. The translation from così to 'that' is not very good but hardly bs, and quello is not relevant.
More accurate translations include "so do they all" and "they all do so".