Here in the 1874 RLDS edition the subordinate conjunction that was replaced with the coordinating conjunction and. The 1908 RLDS edition restored the correct that. Usage elsewhere supports the use of that as a resultive conjunction. For a list of other examples where an original resultive that has been replaced by and, see under 1 Nephi 11:29.
Summary: Maintain in Ether 1:37 the original resultive subordinate conjunction that (“that they were not confounded”), the reading of the earliest textual sources.