Is it okay to use "that" here? And what does "how" mean here? How come "how" was used here?
I think the underlying meaning of "that" and "how" here would be the same. There is only a subtle difference in emphasis and formality. "You know that" almost sounds like a rebuke and would also sound very formal Using the word "how" is indirectly asking you if you know about the existence of the situation explained by it. It places the emphasis on the information and lets you know that this is a rhetorical question. It also sounds much more casual and conversational. In general the use of "how" can also suggest that there is a change of plan coming, and is a more informal form. Ex: You know how we always have pizza on Thursdays? Well, how about we cook instead? Ex: You know how she's always late? Well, yesterday she was early!