Web components don't do any JS isolation, right? And when you say HTML isolation I think its probably important to say that any custom element registered is global, so if Web-Component-A uses Web-Component-B version 1 then Web-Component-C cant use Web-Component-B version 2 (unless Web-Component-B includes the version in its name).

If you want actual isolation of the whole web stack (HTML/CSS/JS) I don't think there are any alternatives to iframes.