Just by looking at the definitions (provided by wikipedia- a good starting point for research, however unreliable for in-depth study), I would venture to say the difference between isolation and quarantine is the harshness of the word. Perhaps ‘quarantine’ is used as to confuse the public and avoid panic. Quarantine does have a close resemblance to vaccine.

i‧so‧la‧tion 
1.
an act or instance of isolating.

2.
the state of being isolated.

3.
the complete separation from others of a person suffering from contagious or infectious disease; quarantine.

4.
the separation of a nation from other nations by isolationism.

5.
Psychoanalysis. a process whereby an idea or memory is divested of its emotional component.

6.
Sociology. social isolation.
[Origin: 1825–35; isolate + -ion]

—Synonyms 2. See solitude. 3. segregation.


quar‧an‧tine 
1.
a strict isolation imposed to prevent the spread of disease.

2.
a period, originally 40 days, of detention or isolation imposed upon ships, persons, animals, or plants on arrival at a port or place, when suspected of carrying some infectious or contagious disease.

3.
a system of measures maintained by governmental authority at ports, frontiers, etc., for preventing the spread of disease.

4.
the branch of the governmental service concerned with such measures.

5.
a place or station at which such measures are carried out, as a special port or dock where ships are detained.

6.
the detention or isolation enforced.

7.
the place, esp. a hospital, where people are detained.

8.
a period of 40 days.

9.
social, political, or economic isolation imposed as a punishment, as in ostracizing an individual or enforcing sanctions against a foreign state.
–verb (used with object)
10.
to put in or subject to quarantine.

11.
to exclude, detain, or isolate for political, social, or hygienic reasons.
(wikipedia.com)