It’s certainly best practice to isolate iot and other ‘less trusted’ devices from accessing your primary lan where devices and data you care about reside. Typically, this is done using vlans though I’m sure the guest network function is better than nothing if you don’t have equipment that supports vlans.
To get a better idea of how isolated the guest network is try connecting a laptop or mobile device to that guest ssid. Can you ping or access devices on your primary ssid/lan? Can you access your router’s web interface, ssh, etc. from it? If so then that guest network isn't doing much. If not then yes, sounds like it will provide at least some level of isolation.
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