Isolated with respect to digital inputs and outputs can mean two things.
1. (isolation to the backplane) There is some kind of circuitry (optocouplers), so that if there is an electrical error, it will not propagate to other channels or the entire PLC. So you will not blow up the entire PLC if someone connects 440V to an input for example. All "regular" PLC IO have this.
2. (isolation between channles) The various cannels on a module have a common voltage on one side (non-isolated). Or have completely individual connections to the PLC (isolated).