"they had renovated" vs "had been renovating"

When I last went to Moscow refers to the most recent time that you were in Moscow. It includes the possibility that you are there now and are recollecting the previous visit. Now let us consider 1b.

Relative to that time, there are several possible statements, of which your own suggestion is roughly statement D1.

A ... they were going to renovate ... renovation was to be started after your visit

B ... they were renovating ... renovation was happening while you were there

C ... they renovated ... renovation was started and completed during your visit

1b = D ... they had been renovating ... renovation had been started before your visit. Notice that there are two sub-possibilities:

D1 It may have (just) been completed. For example: When I ... they had been renovating St Basil’s and it looked wonderful.

D2 Or it may not have been completed. For example:When I ..., they had been renovating St Basil’s but they had had to pause because of heavy snow.

E ... they had renovated ... renovation was already finished before your visit (This your 1a)

From this perspective, 1b is D. The explanation you were given is equivalent to B and it is therefore incorrect.

The simple and continuous forms of all verbs have their respective nuances and you should decide what you want the sentence to mean, and then choose the appropriate form:

All simple forms of the verb indicate an action as a whole - from start to finish.

The simple form of the verb can indicate a habitual or regular action that

(i) is/was/will be complete/completed each time it is undertaken.

A: What do you do to keep fit?

B: I ride a bike. -> “ride” includes everything from getting on the bike at the start of the journey to getting off the bike at the end.

Or

(ii) a single, complete or completed present, future, or past action:

"He told me that I had to visit the Eiffel Tower, so I go/went/will go to Paris on Wednesday” -> “go/went/will go” includes everything from the decision being made, bags being packed, going to the airport, etc., to the arrival in Paris.

(iii) a habitual, recurring, regular or frequent action (that is completed each time)

On Saturdays, I go to the gym.

He ate toast for breakfast every day of his life.

The continuous form of the verb indicates

(i) an action that is/was/will be (i) incomplete and (ii) in progress (iii) at the time that is being referred to (it has started but it has not yet finished) -> I will be/am/was/have been/had been riding a bike = I will be/am/was/have been/had been in the process of riding a bike but have not yet finished riding the bike at the time I am referring to.

The continuous form used to be known as “the imperfect”: It was called “imperfect” because the action had not been “perfected” i.e. it had not finished.

OED

<5. Grammar. Applied to a tense which denotes action going on but not completed; usually to the past tense of incomplete or progressive action.

1871 H. J. Roby Gram. Latin Lang. §549 Three [tenses] denoting incomplete action; the Present, Future, and Imperfect (sometimes called respectively, present imperfect, future imperfect, past imperfect).

If it does mean “still in the process of doing”,is there any difference with “was doing”?

Yes, in the case of "had been" you are referring to the ongoing work that was taking place before you went and that had, at the time of your visit, taken place. In the case of "was", the work was ongoing at the time of your visit