‘that’ is a couple of different things stated in the lyrics.
“But I’ll never do it better than I do it with you
So long, so long
And I would do anything for love
Oh, I would do anything for love
I would do anything for love but I won’t do that
I won’t do that”
Here that is ‘but I’ll never do it better than I do it with you.’
“After a while you’ll forget everything
It was a brief interlude and a midsummer night’s fling
And you’ll see that it’s time to move on
No, I won’t do that
I won’t do that”
And here it’s forgetting everything and moving on.
‘that’ is a couple of different things stated in the lyrics.
“But I’ll never do it better than I do it with you So long, so long And I would do anything for love Oh, I would do anything for love I would do anything for love but I won’t do that I won’t do that”
Here that is ‘but I’ll never do it better than I do it with you.’
“After a while you’ll forget everything It was a brief interlude and a midsummer night’s fling And you’ll see that it’s time to move on No, I won’t do that I won’t do that”
And here it’s forgetting everything and moving on.