Learn English – the difference between “doing something” and “on doing something”

Modest and decent have overlapping semantic ranges. They can mean the same thing, but do not always. To further confuse things, they might get used in the same situation to highlight slightly different aspects of a thing.

Modest can mean behaving in a way that does not draw attention to oneself, of which clothed in such a way that it conforms with sexual norms is a specific case. It can also mean simple because simple things do not draw attention to themselves. From simple, the related meaning of not wealthy or not opulent emerges.

Decent can mean meeting expectations without having the connotation of exceeding them. It can also mean a morally good person, though not necessarily a heroic or saintly person.

Here we have the area where the two meanings overlap: they both imply good in a way that does not attract too much attention. But they are not always interchangeable.

So as to your sentences, I believe the average American reader would consider the sentences about the house to be more or less equivalent. The average American, though, would sense a slight difference in the sentences about the woman, because "decent" is a broader category than "modest". A woman might dress modestly, but lie, cheat, and gossip, none of her acquaintances would call her "decent".

Surely there should be more of a difference between the two words. If they mean the same thing surely there would be no need anymore for two words

There are a lot of near synonyms in English, so this does not follow at all. It's particularly so when you consider that act entered the English language in the late Middle English period, from French, while deed was in the language from the very beginnings of Old English. Many, but not all, seeming redundancies in English vocabulary have a similar origin story.

It is true that there are differences in nuances. The primary one would be that an act would generally be need to be relatively remarkable before we would use the term deed. One can do a particularly brave or noble or dastardly or evil deed, but one can't really do a lazy or everyday or common deed. There's nothing technically wrong with the latter, but it wouldn't be an idiomatic use.

There are similarly some differences in what verbs and prepositions are used with either. One doesn't do an act, one cannot be in the deed of anything.