Your Physical Appliance can be setup either Inline or as a Mirror and our Physical Appliance setup guides provide instructions on how to setup for each. It doesn't matter to the Appliance which configuration is used in order to isolate compromised endpoints.
The Field Effect Appliance won't isolate a network as a whole, nor do we have that ability. The Appliance is the Hub into which your servers and endpoints report their status, collates endpoint data and manages the Field Effect service.
Using the agent installed on your Endpoint we are able to be much more precise in identifying a compromised system, and in turn isolate it from the network to prevent the further spread of malware etc.
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