I was playing with Luminance Selection (Ctrl + Alt + Click on a layer thumbnail) when I accidentally used an Alt+Click instead, and discovered two problems in Isolation Mode, neither of which occur in 1.6.5.123.
Problem 1:
Open 2 files.
In one document tab, Alt+Click the thumbnail for a layer (even the background layer) to enter isolation mode for it.
Switch to the other document tab. Instead of the expected window content, I get the same isolated layer as in the other tab.
Problem 2, continuing from problem 1:
In the tab from step 3 above, exit isolation mode by clicking in the window.
Switch back to the first tab. It is no longer in isolation mode, either.
Edit: Also, continuing from problem 1, another aspect of this: File > Open to open a new document. When it displays, it also displays as that isolated layer, until you exit isolation mode.