Why was this made twice in such a short span of time?

It wasn't that short of time in scope of the time it was made. Films were shown for an initial run and then shelved for the most part. The Unholy Three was one of Chaney's most popular pictures and it revolves around a ventriloquist and mastery of voices, it was perfect for his talkie debut.

Chaney's films with Browning were considered low risk ventures. They never spent more than about $250,000 on them, whereas Chaney's biggest pictures like "Phantom of the Opera" with Universal cost 3 or 4 times as much. Of all the Chaney/Browning films the 1925 "Unholy Three" was by all accounts the most successful, returning perhaps 3 or 4 times its investment and encouraging the studio to continue making low budget films with these 2 and giving them incredible latitude to make shocking films like "The Unknown" and "West of Zanzibar."

However the succeeding Browning/Chaney films did not return on their investment quite as much as "Unholy Three." The title remained popular and so it made sense to remake the film in sound when MGM finally convinced Chaney to appear in a "talkie." However Tod Browning was on the outs with MGM at the time, and was over at Universal directing "Dracula" (which of course, along with "Freaks", would cement his legend in the history of macabre film). So I believe Jack Conway directed the remake. When Browning came back to MGM, they remade another Chaney picture -- "Outside the Law" -- and Browning did direct, but by that time Chaney had passed on and his role was played by Edward G. Robinson.

Did I not love him, Cooch? MY OWN FLESH I DIDN'T LOVE BETTER!!! But he had to say 'Nooooooooo'