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The passage is from a book review entitled "Top 6 Books About Gangsters" by Rod Reynolds.
Sprawling and complex, yet exquisitely plotted, it’s the pathos Ellroy imbues in his tough guys that sets this apart. That and the fact that it features the villainous Dudley Smith at his absolute zenith.
What is the meaning of "That and the fact that"? What does the first "that" refer to? Is the second sentence a fragment?
The first 'that' refers back to what has already been stated ('the pathos Ellroy imbues in his tough guys'), which the writer gave as a reason for this work being 'set apart' from others. The writer then goes on to add a second reason.
Essentially, your quotation means:
What sets this [book] apart is that (i) the pathos Ellroy imbues in his tough guys, and (ii) that it features the villainous Dudley Smith at his absolute zenith.
"That fact that..." is a familiar phrase found in dictionaries. It is a way of introducing something as fact, rather than opinion. Your example appears to be a book review, which may well be mostly opinion, so this is a useful phrase. However, it is sometimes overused and is often just an alternative way of saying "that".
