Based on the arguments above and the information we have, this would appear to be the correct ruling.

I agree that it's a successful attack, but the attacker takes the unavoidable damage.

The rules explain a critical miss as, "If you roll two 1s on an attack roll, you automatically miss the target, even if your attack total would allow you to hit the target. This is called a critical miss."

The resulting unavoidable damage is explained after critical miss is defined. It is an effect of a critical miss, but it is not the critical miss itself.

Taking it further, Improvise does not change the result of the attack roll, only the result of the attack. The attack roll is still two 1s. When you roll two 1s, the attacking character takes 1 unavoidable damage.

Rolling two 1s would also do knock back with improvise huh?

What people have not mentioned is the precedent of Opportunist. The ruling was that you cannot raise a roll of two to three to make it a hit. A critical hit is still a critical hit. This may be how it may be ruled. Although the other possibility is reasonable as well.

The ruling for Opportunist is not the same as Improvise. Opportunist only changes the attack roll. Improvise specifically changes the result of the attack from a miss to a hit.

Everyone at my venue felt that snake eyes while playing the Great Arena meant critical hit. So I don't know why this would be any different.

With the Great Arena, a roll of doubles has to be a successful attack for it to become a critical hit.
A roll of double 1's is an automatic miss (at least until Improvise hits the scene) so it could never be successful.

Improvise specifically says a miss becomes a hit. Great Arena says only a successful attack roll that is doubles is a critical hit. For Great Arena, you already need it to be a hit to make it critical. For Improvise, you just need tokens on the card. They are two different effects and should not be compared for a ruling.