It's not 3d, it's actually 2d only. Point of isometric is to give the illusion of 3d, which requires this "depth sorting".
You can make the GPU solve this for you, pixel perfect, by using 3D geometry.
I think it's commonly referred to as 2.5D?
So because everybody fakes isometric with some 2D algorithms, you don't allow yourself work with 3D ? Ofcourse if you really want to work with 2D, that's fine
The screenshot in that link, was just a 3D scene, rendered in isometric perspective.
Isometric perspective is achieved using a specific projection-matrix. You can easily handle the most complex shapes, even intersecting geometry, just like any 3D perspective, using the depthbuffer.