That's correct.
Now, that doesn't necessarily mean they were isolated from each other, however. If we suppose that the population was actually 5000 people (just an example; I have no idea if this is a realistic number), then some percentage of those people died with having children, some may have seen their children die, etc. Of the 1280 people who still have living descendants, many of them would have had children with those people who did not, but those children (or grandchildren, etc.) eventually did not have any children themselves.
Within your own social circle, you likely know some people who will still have living descendant generations from now and some who will not.