What is this Circuit's function? Does it involve Isolation?
It's simply ESD protection for both of those X data lines.  Nothing more.

The GL\$05\$T provides protection against positive transients that exceed the \$5\$V avalanche breakdown of that device, and the BAW\$56\$ signal diodes provide protection for negative transients below the Vf of that diode, which is about \$0.7\$V, so they would start to conduct for any negative transients that exceed \$-0.7\$V. 

It's not an isolation circuit, as there is a clear path to ground, therefore it is not isolated, by definition. 


  how should I implement an opto-coupler to provide isolation between
  the data lines ("X Volts") and ground


It's not entirely clear to me what you want to do here, since you have provided too little information about the signal on the "X Volts" lines. If you want to isolate a signal, then there are plenty of opto-isolated signal examples to be found on the web, and the signal lines before the opto-isolators might still require the same ESD protection as your post shows, but you would not send transients into the signal ground, they must only go to the protective ground. 

For fast differential signals, you will want to use a digital isolator, such as the Analog Devices ADuM\$1100\$ or ADuM\$1200\$ and friends. Optocouplers are generally too slow for this.  For a bidirectional bus like USB you must use a specialized isolator like the ADuM\$4160\$.