An equilibrium point in a simple linear time-invariant system is considered isolated when it is the only steady state that attracts the system's state from any initial condition. This typically occurs when the system is stable, meaning small perturbations will return to the equilibrium point. In contrast, non-linear systems can exhibit multiple isolated equilibrium points. The discussion emphasizes the importance of defining isolated equilibrium points and understanding their stability within the context of linear systems. Overall, an isolated equilibrium point signifies a unique and stable state in the system's dynamics.