questions about on fly isolation with Azure

Hi!

I would like to make incremental backups to Azure Cool storage where
uploading costs much less then downloading data, so I would absolutely try
to stay away from downloading data and only keep it for emergency scenarios.
Previously I haven't used such storage and isolated the catalogue after the
archive creation, so I was happy to see the "on fly" option.

My questions:

1. Am I right that "on fly" isolation solves my problem about minimal
download needed, because the archive is only going to be uploaded to Azure
and the isolation extraction is happening on the host-side without any data
needed from Azure?

2. The log looks like this sequentally, so it gets me a bit worried,
because according to this the isolation only occurs after the archive
contents have been written. And further more these are real big archives
(300GB+), so memory is out of the question here:
----
Writing archive contents...
...
Making room in memory (releasing memory used by archive of reference)...
Now performing on-fly isolation...
Preparing the archive contents for isolation...
Writing archive contents...
Final memory cleanup...
----

3. It is not clear for me why a normal "after-isolated, -C" catalogue of
the same thing is 380932 bytes when the "on fly" catalogue is 98967 bytes.
I am using encryption btw, but at both cases...

Thanks all for you help!

Regards,
Daniel