You don't have to move everything twice, just the stuff that's moving.
Why does it need to be processed twice?
Because physics don't merely change locations of objects, they also change the objects themselves (for example, when hit or exploding, or for vegetation, hair, clothing and fluids), and they trigger events that have to be updated.
For example, if someone gets hit, wet (rain or splases), gets in the shade of a piece of debris, or in the blast radius of an explosion, you would have to reskin them. And of course, you have to calculate all the lighting and texture data afterwards.
So, you first calculate all the new locations and statusses of all your objects, according to your game logic, then you send them to the physics coprocessor that handles collision detection and physics, which returns all the changed objects and states. Which can be very little if not much is happening in the scene, no wind, vegetation, water, explosions or whatever, to most of the scene when you do have many of those.