The isolation respponse is how HA reponds to a host losing network - as you see it gives you two choices to either leave the VMs running or shut them down. If you have a sufficiently redundant network leaving them running will allow users to continue to access the VMs - Shutting them down will allow you to restart the vMs on another host.
HA does not consider loss of network connectivoty to a host as a failure so it does not failover the VMs and remember HA doe not utilize vMotion.
