Browser isolation isn't quite that. It's just running a browser that is heavily sandboxed from internal files and networks, or running on another machine so any exploits don't hit your machine.
It's very much like running a browser through Citrix (in particular the remote flavour which is the most common as far as I've seen). But of course any data in the browser itself is still within reach for the malicious code... Which only solves half the problem. Unless you rigidly separate internal browsing from external sites.
But it doesn't run all the JavaScript and then send you a screenshot or anything. The resulting page is still interactive.
Remote browser isolation has the ability to change the landscape of personal computing enormously by the way. Right now we equip all our laptops with at least 16GB (32 for customer care) because some web apps like Salesforce Lightning are such memory hogs.
Considering the importance of the browser in modern computing this model world basically make the PC more like a terminal and require much less resources.
Of course this has already been going on with web based apps and streaming of things like games but this could be the final nail in the coffin of the PC as we know it. Not sure I'm happy with that...