Is there a need for signal isolation before its measurement?
The AMC1200 datasheet gives you an example:

That's a motor that runs on high voltage.  It has a current shunt to measure the current to the motor.
If you connect the current shunt straight to an opamp powered by your low voltage system (microprocessor,) then the high voltage would immediately destroy the opamp.
The AMC1200 can be powered from the high voltage system, and transfer the measurements to your low voltage system.
You do that kind of thing only when you have to.
You wouldn't do it to measure current through a motor driven by the low voltage power supply of your Arduino.
Imagine you are trying to measure the current in a 400VDC motor in an industrial setting.  You don't want your controller exposed to high voltage, not even when something goes wrong.  You use isolation to protect your controller from damage in normal operation and when the motor goes &quot;bang&quot; and dumps high voltage and high current through every thing connected to it.