What it the right choice?
Which of the following statements is correct and why?
In other words, is it OK if we bring "it" or if used, it would be redundant and grammatically wrong?
- It is used for an action that we know "it" will happen...
- It is used for an action that we know will happen...
Solution 1:
The four valid constructions are...
1: It is used for an action we know will happen
2: It is used for an action that we know will happen
3: It is used for an action where we know it will happen
4: It is used for an action where we know that it will happen
...where #2 and #4 are effectively the same syntax as #1 and #3 respectively (they just happen to be contexts where the relativiser that is completely optional). But these are the invalid permutations...
5: It is used for an action we know it will happen - NOT VALID
6: It is used for an action that we know it will happen - NOT VALID
7: It is used for an action we know that it will happen - NOT VALID
It may be useful to discard the "we know" element in OP's examples. Whatever "it" is, presumably it will happen, regardless of whether we know that or not...
8: It is used for an action that will happen
9: It is used for an action where it will happen
Note that these are the only syntactically valid variations without "we know". And I may be mistaken, but offhand I can't think of a valid context where the two uses of the pronoun "it" in #3, #4, #9 (the where versions) both refer to the same thing. I'm pretty sure they'd always have to be (contextually established) different things.
Solution 2:
The restrictive clause that we know will happen describes what type of action "it" is used for. that here introduces the restrictive clause and gives us further information about the action.
If you want the second sentence to make sense, you would have to drop that and insert a different word there. Of course, the meanings of these two sentences might differ vastly.