Object A references object B. Object B references object A. Neither object A nor object B is referenced by any other object. That's an island of isolation.
Basically, an island of isolation is a group of objects that reference each other but they are not referenced by any active object in the application. Strictly speaking, even a single unreferenced object is an island of isolation too.
Edit from Comment:
class A {
B myB;
}
class B {
A myA;
}
/* later */
A a = new A();
B b = new B();
a.b = b;
b.a = a;
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