They are not “completely isolated”, but it is a lie that universities like to perpetuate that the strength of their PhD programs has a major impact on the undergraduate curriculum. For most undergraduate degrees, the curriculum is pretty standard at the vast majority of institutions, especially in the first 2 years.
In the past 2 decades, state support for public research universities has been steadily declining, at an accelerated pace in the past 5 years. Public research universities have responded by protecting their PhD programs and hiring armies of non-tenure, poorly-compensated adjunct professors to take on the bulk of teaching in the lower division.
Furthermore, even when you do have “distinguished” research professors teaching lower division undergrads, there is no guarantee that just because they are excellent researchers that they will be outstanding teachers.
I was an undergrad in physics at Harvard in the late 80’s, early 90’s. The professors had open disdain for the undergrads, and the quality of the teaching was dreadfully bad… I distinctly remember thinking to myself in my intro classes, “was I really willing to sell my soul to the devil to get here, and the teaching is worse than my high school??” To be fair, I have friends who are now professors there, and apparently there has been significant improvement in teaching in physics. And certainly, other departments always had far better teaching.