The last solution I looked at to do something like this was using tap / tun devices for networking. How does unikraft handle network isolation and virtualization?
It relies on your hypervisor and/or network hardware to provide that. In an ideal circumstance (e.g. running on a multiqueue NIC with VFIO or virtio acceleration), your VM can talk directly to the network hardware. Major clouds will provide something morally equivalent via their newer network interfaces (gVNIC etc.).
From my limited understanding, it has the same isolation advantages as that of a VM and therefore it's as strong as the hypervisor you use