~
If I have $1000 in my Margin account and I put it all in a 10x Isolated short trade for $10000 (meaning I am borrowing $9000), the Liquidation Price is then worked out at the exact point where I have lost the full $1000 from my Margin account and I cannot lose any more than this on this trade? is my understanding correct?
In isolated margin Yes!
If you short or long with 100$ in isolated margin you'll be liquidated when you lose 100$ ( and your remaining balance would be 900$ after 100$ loss. if you had 1000$)
On the other hand, cross margin is different. For example, if you long or short with $100, and you have $1000 in your margin account then your trade won't be closed until you have 1000$ loss. However it won't effect your spot wallet as it is independent/different wallet.
There is a binance article about it, you can read it:
Differences Between Isolated Margin and Cross Margin