"They are laughing and laughing, while they walk down the hill."
Translation:He nauravat ja nauravat, kun he kävelevät alas mäkeä.
There are two clauses here: the main and a subclause. While they have the same subject, he, in the standard speech it must be repeated because a subject doesn't carry over between a main and a subclause.
In colloquial speech you can leave the second out, but I advice against it in this phase of learning.
The sentence is grammatically correct, but a Finn wouldn't say that way.
I've stated several times that Finnish is a highly from theme to rheme oriented language. That means you begin a sentence with known things and end it with new information. The sentence here is problematic in that regard.
First another issue, instead of nauravat ja nauravat a more natural way is to say naureskelevat with -ella/ellä ending showing continuing or repeating action.
If what you want to tell is that they keep laughing while walking down the hill, the order of the clauses should be reversed:
- Kun he kävelevät alas mäkeä, he naureskelevat.
However since the subclause is describing the subject, instead of a subclause you often use a non-finite clause:
- Kävellessään alas mäkeä he naureskelevat.
But non-finite clauses are definitely out of the scope of this course.
If what you want to tell is the walking and while doing it they laugh, then only a non-finite clause is possible. Actually there are two possibilities with the latter being more common (they also have a nuance difference):
- Naureskellessaan he kävelevät alas mäkeä.
- Nauraen he kävelevät alas mäkeä.
So all in all the sentence as such sounds to be a little off.