In theory, ANY transformer (other than some simple "tap" transformers) is an Isolation transformer as it electrically isolates the input current from the output. But most would consider an isolation transformer to be one that has the same input (main line) voltage as it does an output. IE 120 -> 120 or 240 -> 240.
While I am not that well versed on CES, I would assume that an Isolation transformer would be added in the case where line voltage were to appear anyplace other than at the transformer or power distribution assembly (120V coils, fans, etc.). However, in compliance with UL 22 requirement, Gottlieb/Premier installed a safety interlock switch on the front door to disconnect line voltage should a "non-qualified personnel" were to enter the cabinet where voltages higher than 48VDC were present. Some early 70's Gottliebs also had a small microswitch added just under the lock down bar receiver which disconnected the AC line voltage from the transformer. Thereby killing all power to the game (other than the AC wiring which lead up to the switch and at the transformer and main line fuse).
Isolation can also be a way to pass Hi-Pot testing where extremely high voltage is applied to the joined line cord inputs and then the cabinet is checked for leakage to any exposed metal or from line voltage inputs to earth ground. Only a certain amount is allowed. Adding a good isolation transformer solves any shortcomings.
Sometimes, what you might think is an isolation transformer is actually a step up or step down transformer to convert the operating voltage to that of the local line voltage. Although many modern games are made with voltage taps to convert the line voltage to anything from 90 VAC (low 100VAC) to 240VAC. In order to save money, many Domestic Gottlieb games were made with line transformer with only one set voltage (120VAC). But the game built for export may have used a dual voltage tap transformer. But likewise, we have seen games which only have 220VAC as an input option.
I am sure the gray 12VAC filament transformer was added to power the sound board simply because the installer looked to see what the WMS pinball game it came out of required. And not trying to cross reference the board to video game application etc. where DC was used instead.
Back to CES and Canada. Many "converted" games have been found with additional EMI filters installed between the incoming line cord and the rest of the game. I believe this is to help the games pass a more stringent RF/EMI emission testing in Canada verses the US.