Putting IoT devices on your guest network is a very common home security/privacy thing to do. They very often snoop when they can, and your router shuts that down on the guest network.
This is an order of magnitude more complex than I trust a home router to do, though...
To be clear, I agree that putting IoT devices on a separate VLAN is a good idea but I do that because they're black boxes, not because they're malicious.
- Those controllable (only) through the manufacturer's server and requiring an Internet connection: put them on the guest network that only has a (NATed) route to the Internet and nothing else (ideally, of course, don't buy them);
- Those controllable over LAN and not requiring an Internet connection: put them on a jail network that has a route to the main network and is firewalled away from the Internet (and perhaps from initiating connections to the main network as well).