I thought the design of the isolator with it's angled ramps was clever (watch the video at the bottom of the article). But as you say, there's no protection in the vertical direction. My time in California has been limited, so I don't know what the z-axis velocities and displacements would be like in a significant earthquake. Since they spent a non-trivial amount of money on designing this, I can only assume the consultants & engineers took that into account.