I am installing a 3rd battery on the Sea Ray and I see lots of different ways on installing it. Currently each engine has its own battery and battery switch that is separate from the other engine. . There is a 2 way (off, 1, all, 2) battery switch for each battery BUT the batteries are not connected to each other ( I dont know why). I was also thinking of getting an isolator so the house battery doesn't drain the starting batteries. I have seen isolators and automatic charging relays, but which is better? So here is the setup. Twin engines, currently have two battery switches, and 3 batteries (of which Id like to designate them as 2 starting batteries and 1 house battery)

I have the same setup. 2 engines, 2 switches and 3 batteries. I added the 3rd battery(31 deep cycle) for the stereo.

Each of the starting batteries is wired to position #1 on each switch.
The 3rd deep cycle is wired to #2 on both switches.

This gives a variety of options. If I run either switch on ALL, it will charge the starting battery and deep cycle simultaneously.
If I switch both switches to ALL, it will essentially combine/connect all 3 batteries.
So realistically, if I had 2 dead batteries, I should still be able to start both engines no matter which 2 are dead.

So you dont have a isolator or ACR?

With a switch, you really don't need an isolator or relay if you have shore power and a charger with multiple legs. If you don't have shore power or only have a single bank charger you would want an ACR... and a HO alternator if no shore power. An isolator causes a voltage drop so you'll never get a full charge. Better to just use the manual switch.

If you have the room and need house/stereo power that will last all day or longer, two 6v golf cart batteries are a true deep cycle setup. A single 12v "deep cycle" is not much better than a starting battery.

The problem with switches and batteries are people.

To remove people from the equation an ACR is great to have to charge a house battery.

So, you have to be honest with yourself and then decide which way to hook up your batteries.

No. I have full control as to what gets charged when with the switches

Use an ACR over an isolator. Isolators are diodes and by nature will have a slight voltage loss going thru it. An ACR is a switch, open/close. 12v in, 12v out.

Will you notice any difference between the 2, probably not. But given a choice, I'd do the ACR. Plus isolators are old school