A correct sentence would be: When they were designing the product, they paid attention to...
Is this grammatically correct: When designing the product, attention was paid...
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Subjectless preposition phrases using gerund-participles have no tense and can be interpreted as referring to present, past or future time. The time being referenced is understood by reference to the time referred to in the main clause, sometimes in combination with a perfect construction in the preposition phrase.
While they were designing the product, they paid attention to... (1) correct
They paid attention to ... , while they were designing the product. (2) correct
That's because we give (while + was/were +v.ing) to the previous action that was interrupted by another action -The newest action takes (when+V2).