Tafsir of Al-Anfal 8:18

(That): This is a demonstrative reference to the "good trial." Its grammatical place is nominative, acting as the predicate for an omitted subject.

(And that Allah is the weakener of the disbelievers' plot): This is conjoined to the previous demonstrative. That is to say: the objective is the testing of the believers, the weakening of the disbelievers' plot, and the invalidation of their stratagems.

It is also said: The thing referred to is the killing [of the enemy] or the throwing [of missiles/arrows], and the [implied] subject is "the matter"—meaning: the matter is that [killing or throwing]. In this case, His saying, "And that Allah..." would be in the category of ‘Atf al-Bayan (explanatory conjunction). Others have said: The thing referred to is everything previously mentioned, interpreted collectively. It is also permissible to consider the demonstrative pronoun as the subject with an omitted predicate, or to consider it in the accusative case due to an implied verb.

Ibn Kathir, Nafi‘, and Abu Bakr read muhannin (weakener) with a tashdid (doubling of the letter) and the accusative case for kayda (plot). Hafs from ‘Asim read it with takhfif (lightening/no tashdid) and idafa (genitive construction). The remainder of the readers read it with takhfif and the accusative case.