An isolation transformer by itself only isolates the connected equipment from ground.
If the voltage increases (or decreases) on the supply side of the transformer, the output side of the coil also goes up or down. So, if a 120 volt AC supply surges to 150 volts, that will be passed through the windings and 150 volts will appear on the output side of the coil. Same thing with a voltage drop. In the absence of any other circuitry besides the transformer, a rise or drop in input voltage will have a mirrored increase or drop in output voltage.
There is a probably a natural upper limit to the voltage that the transformer will pass without burning itself out, but you're well beyond any safe voltage for connected equipment at this point.
A transformer also won't pass DC, but the presence of sufficient DC on the input can overheat the transformer and it will also decrease its efficiency and output capacity.
A transformer can also offer a reduction in RFI on an AC line since the ability of a transformer designed for wall current to pass high frequencies falls off as frequency increases. But that's a probably a noise issue more than a safety one.
Surge protection strips are a different animal. They have an active component that senses voltage irregularities and will interrupt the circuit in order to prevent damage.
Now, that's not to say that a device can't contain circuits other than just the isolation transformer. You'll need to carefully look at the manufacturer's specifications to see what the capabilities are.