L2 isolation doesn't prevent broadcasts and multicasts from being generated. Proxy ARP within broadcast suppression will help with this, to some degree and client devices are generally better these days at handling resultant traffic in some volume than previously, but not to the level of a /16 subnet, I would think. https://documentation.meraki.com/MR/WiFi_Basics_and_Best_Practices/Broadcast_Suppression_and_Control_Technologies_for_MR_Access_Points
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