The I2C isolator board keeps a short downstream of itself from locking up the entire I2C bus as it will if all devices share the same path to the flight controller like they do attached to the PDB. By putting the board in line between the F/C and all of the BLs, a failure of any one BL will not effect the commands going to any of the others since the isolator effectively puts each BL on its own circuit.
Now how useful the isolator board will be depends a lot on how many motors you have, if its a quad, don't bother as the failure of a motor for any reason, I2C bus or not, is going to send it to the ground really quickly. On a Hexa, you may or may not have enough control to get it back on the ground if a motor fails, some people say its possible, others say it isn't. Personally I haven't experienced or seen anything to convincingly confirm either opinion although I do have an isolator board in my Droidworx Hexa.
It IS a well known fact that an Octo can survive loss of a motor and continue to fly, so in that case the isolator board is absolutely worth having as it can mean the difference between an expensive pile of broken bits and an Octo that just needs a BL replacement or repair.
Of course if you're using an I2C converter and standard ESCs with an MK flight controller then the isolator is of no use at all because the only thing on the I2C bus downstream of the F/C is the converter, and if it fails you're done regardless.
Ken