Just to be clear VMware HA will only restart the VMs if the ESXi hosts fails - or if VM monitoring is enabled which will monitors VMs if they crash or hang and restart the affected VM -
and just to be clear the isolation response setting has nothing to do whther HA will work or not - it will only come into play if the ESXi host becomes isolated from the HA Cluster -
xMotion only works between active ESXi hosts that can communicate to the vCenter server - so if the ESXi host is crashed or has become isolated then vMotion will not work.
vMotion is automated with DRS which will vMotion a VM needing more resources to an ESXi host with sufficient reosurces -