I understand that X cannot equal to -2 because the denominator becomes 0. However, if we apply -2 to the whole expression then we get (4-4)/(-2+2). Simplifying we get 0/0 and the ETS rulebook does say that 0 is a factor of itself so wouldn’t that mean 0 in this case? since 0*0=0 then 0/0=0
0 being a factor of itself does not imply 0/0 = 0.
0 being a factor of itself is true because 0 = 0*0.
You are dividing both sides by 0 to arrive at your conclusion that 0/0 = 0. However, dividing by 0 is not a valid operation, so you arrive at a false conclusion.
It is important for the GRE to remember that nothing can be divided by 0 and yield any meaningful output.