Here is the original item:
When Kate saw the gray worm on the dissection
tray. (A)
She folded her arms
(B) and refused
to pick up the scalpel
(C) even though
she would earn a zero in lab.
You wanted to do this:
When Kate saw the gray worm on the dissection tray. She folded her arms
and refused to pick up the scalpel. Even though
she would earn a zero in lab.
Putting a period after scalpel will make even though she would earn a zero in lab a subordinate clause fragment. You need no punctuation between scalpel and even though.
You might want to review the rules.