It simplifies the system a lot, because the grid provides "instantaneous" load matching for your house. If the inverter is sourcing more current than your house is sinking, the grid will sink it. If the house is sinking more current than your inverter is sourcing, the grid will source it.
When there's a utility outage, you need something else to provide the load matching. Either a local generator, or a battery is common; but either way, it's a lot more expensive.
I think they need external signals to tell them which mode to operate in.
Maybe the external system sees the frequency and voltage dropping or lower than normal range and decides to disconnect the load from the grid and opens a breaker and tells the inverter to operate in isolated mode.
When the external system sees the utility power is good again it could tell the inverter to shut off, close the breaker to connect the load to the utility, and then the inverter can go back to grid tie. The outage can be very short unless the load is large motors they don’t like the instantaneous change in phase when switching between different sources that are out of sync.
Yeah, that's the actual reason. I've seen someone use a small Honda generator to generate the frequency required to trick the solar generator into going... it's a weird setup because you basically tie in your generator using a breaker, so both generator and solar can be enabled at the same time.