"Capisco che non è facile."
Translation:I understand that it is not easy.
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To explain erdnaoluap's point a little more technically, you confused the use of "that" as a pronoun with "that" as a conjunction. "I understand that is not easy" really means "I understand that (THING) is not easy" rather than "I understand that it is not easy." In one, "that" describes a noun, while in the other, "that" joins "I understand" and "it is not easy." In Italian, these functions are served by different words (quello, quella, etc for the adjective/pronoun use and che for the the conjunction) so it's much more clear cut than it is in English.
There seems to be "I know" = "I am aware of," "I know" = "I understand," and "I know" = "I am acquainted with (a person)". What I don't capisco is why sometimes "capisco" translates to "I understand" and sometimes it translate to "I know," when in English those two are almost always interchangeable.
There can be a difference if we say, "I know the lyrics to the song, but I do not understand them." But with something like, "I know it isn't easy," and "I understand it isn't easy," those both mean exactly the same thing on every level in English.