"That" vs "It" as Anaphoric Determiners

The main answer is that that and this can be used as deictic pronouns, and it cannot. Whether the “getting pointed out/at” feature is particularly relevant depends on the specific intent of the speaker, and isn’t always necessary or meaningful.

Beyond that, I don’t think there is much of an answer to when you specifically need to use that (or this) versus it when referring back to previous general references. In a few cases, one may be preferred over another, and a native speaker will have a feel for it. But this isn’t easy to spell out as clearly fish or fowl, and these are often interchangeable because people know what you must mean.

“It” implies something that is already the subject of discussion. “That” refers to a topic being discussed. “That” has a more specific and concrete implication, whereas “It” is more general and abstract.

It:

A: "You've gotta go with me."

B: "Would you please stop talking now, it's annoying."

That:

A: "Your answer was accepted."

B: "Oh, that's great!"

That/This = physical, distance, discomfort - seeks relief in distance

It = abstract, confidence – even regarding negative conditions

1. You know it´s true. (abstract, confidence)
2. That´s not what I meant. (discomfort)
3. Of course I know that. (discomfort)
4. That´s too much for me. (physical)
5. It´s too much for me. (abstract)
6. What is it? (abstract)
7. What is that? (physical)
8. That´s hot! (physical, discomfort)
9. That´s a good idea (not mine = distance)
10. That feels good (physical)