The remarkable thing about many of the medicines dismissed THEN AS 'snake oil' IS NOT SO MUCH THAT they failed to live up to the outrageous claims made for them - those that weren't harmless coloured water could be positively dangerous.

You've parsed the sentence incorrectly and, sticking with a false assumption, tried to decode a meaningless phrase. As such, your question is an XY question; it would have been better to ask us what the whole sentence means.

Here's how you should read the sentence:

  The remarkable thing
about
  many of the medicines dismissed then as 'snake oil'

is not so much that
  they failed to live up to the outrageous claims made for them
[but that]
  those that weren't harmless coloured water could be positively dangerous.

The idiom here is:

It is not so much that X, but that Y.

It means, loosely that, although X is true, Y is more true, or more relevant, or more of whatever the context calls for.

• In this case, it's "more remarkable" that the snake oil medicines could be actively harmful, than that someone had lied about them.

The remarkable thing about many of the medicines dismissed THEN AS 'snake oil' IS NOT SO MUCH THAT they failed to live up to the outrageous claims made for them - those that weren't harmless coloured water could be positively dangerous.

You've parsed the sentence incorrectly and, sticking with a false assumption, tried to decode a meaningless phrase. As such, your question is an XY question; it would have been better to ask us what the whole sentence means.

Here's how you should read the sentence:

  The remarkable thing
about
  many of the medicines dismissed then as 'snake oil'

is not so much that
  they failed to live up to the outrageous claims made for them
[but that]
  those that weren't harmless coloured water could be positively dangerous.

The idiom here is:

It is not so much that X, but that Y.

It means, loosely that, although X is true, Y is more true, or more relevant, or more of whatever the context calls for.

• In this case, it's "more remarkable" that the snake oil medicines could be actively harmful, than that someone had lied about them.