In wireless system, diplexer is used to make TX and RX work at the same time. TX/RX isolation refers to TX signal goes through TX SAW filter, RX SAW filter, and shows up at RX port. If this path attenuation aka isolation is not high, RX sensitivity can be badly impacted since RX signal power is normally low.
Here TX and RX work at different frequency band. As show below.
The combined isolation is shown as below. So we have good isolation except at the TX/RX band overlap section. This overlap is due to non-ideal SAW filter. So ideally we’d like SAW filter freq response as sharp as possible.