וכמו שכתב הרמב״ם ז״ל, שהוא היודע והוא הידוע והוא הדיעה עצמה, הכל אחד

As Maimonides, of blessed memory, stated, that He is the Knower, He is the Known, and He is Knowledge itself: all are one.

This is radically different from mortal knowledge, which comprises three distinct elements: (a) the person's soul - the knower; (b) the subject that is known; and (c) the power of knowledge - the faculty of Daat, which enables the knower to know the known. In the Divine realm, however, these three elements are all one: all are G‑d. (See ch. 2 of part I for further elaboration of this theme.)

ודבר זה אין כח בפה לאמרו, ולא באזן לשמעו, ולא בלב האדם להכירו על בוריו

This - Maimonides goes on to say - is beyond the capacity of the mouth to express, beyond the capacity of the ear to hear, and beyond the capacity of the heart or mind of man to apprehend clearly.

כי הקב״ה, מהותו ועצמותו, ודעתו, הכל אחד ממש מכל צד ופינה, בכל דרך יחוד

For the Holy One, blessed be He, His Essence and Being, and His Knowledge  -  are all absolutely one, from every side and angle, and in every form of unity.

ואין דעתו דבר נוסף על מהותו ועצמותו כמו שהוא בנפש האדם, שדעתה

His Knowledge is not superadded to His Essence and Being as it is in a mortal soul, whose knowledge is added to its essence and is compounded with it.

הרי כשהאדם לומד ויודע איזה דבר, כבר היתה בו נפשו המשכלת בטרם שלמד וידע, ואחר שלמד וידע ניתוספה ידיעה זו בנפשו

For when a man studies a subject and knows it, his rational soul was already within him before he studied and knew it, and afterwards, this knowledge was added to his soul.

Man's knowledge is thus a supplement to his intrinsic being; through it he becomes aware of something he did not know before.

וכן מידי יום ביום: ימים ידברו, ורוב שנים יודיעו חכמה

And so, day after day, "Days speak, i.e., instruct a person, and a multitude of years teach wisdom."

ואין זו אחדות פשוטה, אלא מורכבת

This is not a simple i.e., perfect unity, but a composite.
The Alter Rebbe means the following: Although man's knowledge, too, is united with him (lit., "with his soul"), for it is the person himself who knows, nevertheless this is not a perfect unity, for "simple" implies that any alternative would be inconceivable. Since a man's knowledge is acquired, not having been part of his essential being, its acquisition yields an imperfect and composite form of unity, a unity comprised of two separate entities that have coalesced.

אבל הקב״ה הוא אחדות פשוט, בלי שום הרכבה וצד ריבוי כלל

The Holy One, blessed be He, however, is a perfect unity, without any composition or element of plurality at all, inasmuch as it is impossible to speak of any aspect of Him as not having existed previously.

ואם כן

Hence, since His unity is perfect and uncompounded, one cannot say that His Knowledge is something apart from Him, for that would imply, heaven forbid, a composite  -  that his knowledge is superadded to His Essence, effecting a change within Him. Rather:

על כרחך מהותו ועצמותו ודעתו הכל דבר אחד ממש, בלי שום הרכבה

one must conclude that His Essence and Being and Knowledge are all absolutely one, without any composition.

ולפיכך, כשם שאי אפשר לשום נברא בעולם להשיג מהות הבורא ועצמותו, כך אי אפשר להשיג מהות דעתו

Therefore, just as it is impossible for any creature in the world to comprehend the Essence of the Creator and His Being, so it is impossible to comprehend the essence of His knowledge, which is One with G‑d Himself;

רק להאמין, באמונה שהיא למעלה מהשכל ומהשגה, שהקב״ה יחיד ומיוחד

[it is possible] only to believe, with a faith that transcends intellect and comprehension, that the Holy One, blessed be He, is One and Unique.

Inasmuch as faith transcends intellect, it is able to apprehend truths that lie beyond the province of mortal intellect.

הוא ודעתו הכל אחד ממש, ובידיעת עצמו מכיר ויודע כל הנמצאים, עליונים ותחתונים

He and His knowledge are all absolutely one, and knowing Himself, He perceives and knows all the higher and lower beings, i.e., the beings in the higher and lower worlds,

עד שלשול קטן שבים, ועד יתוש קטן שיהיה בטבור האר׳

including even a small worm in the sea and a minute mosquito that may be found in the center of the earth;

אין דבר נעלם ממנו

there is nothing concealed from Him.

ואין ידיעה זו מוסיפה בו ריבוי והרכבה כלל, מאחר שאינה רק ידיעת עצמו, ועצמותו ודעתו הכל אחד

This knowledge does not add multiplicity and composition to Him at all, since it is merely a knowledge of Himself; and His Being and His knowledge are all one.

Thus, by knowing Himself, He knows all created beings that derive their existence from Him and that are utterly nullified to Him and unified with Him.

ולפי שזה קשה מאד לצייר בשכלנו, על כן אמר הנביא: כי גבהו שמים מאר׳, כן גבהו דרכי מדרכיכם ומחשבותי ממחשבותיכם

Inasmuch as this form of knowledge is very difficult to envisage, the Prophet [Isaiah] therefore said, "For as the heavens are higher than the earth so are My ways higher than your ways, and My thoughts than your thoughts."