They're called sewage "lagoons" and work basically the same as septic systems from a environmental impact perspective. They only really work well in certain climates and even then you need to have enough spare land to just locate a sewage pond somewhere. Even in richer areas it was dirt common for schools and prisons (which aren't likely to be located in the center of town like other government stuff is) to have them way deeper into the 20th century than you'd expect since it's not like they were short on land (just use more taxpayer money).

Normally the plumbing runs underground but those people have a trench solution likely because they added a bunch of trailers to the property and more lines were out. There's probably some weird government rules at play here. Like they don't want to dig pipes into the ground because screwing with their grandfathered in lagoon would be "state problems" level illegal whereas right now it's "municipality problems" level illegal and the latter doesn't wanna stomp them with the jackboot for obvious political reasons.

The clean water act and it's knock on rules really act as a huge impediment to "it won't make it compliant, but it will make it a hell of a lot better" fixes in cases like this.