Kube-proxy running as a pod

How can kube-proxy running as POD on all nodes have the access to linux nodes to execute iptables commands (as the pod is isolated from node processes) ?

using CNI example calico it will take all the required networking routes. here, Kubernetes isolates one pod to pod based on the name spaces. for better practice try to deploy your applications in different namespaces

How can kube-proxy running as POD on all nodes have the access to linux nodes to execute iptables commands (as the pod is isolated from node processes) ?

Pods are not necessarily isolated from the node, kube-proxy as a pod is typically running in the host network namespace (hostNetwork: true) and thus iptables commands affect the host’s network instead of a container specific network namespace.

There are other options that allow similar reduction in isolation e.g. hostPID