Android - How can I run apps in an isolated environment on my smartphone?

Xiaomi MIUI has a feature called SecondSpace. It sets up a completely isolated 2nd instance of Android similar to a VM. You can have completely separate settings there and not affect your "real" phone.

Alternatively run the app as a completely new user (Settings->User). But getting the account setup might be too onerous.

As Xiaomi's SecondSpace was mentioned, I'll throw in Parallel Space for those not on a Samsung or Xiaomi device. It is an app for virtualizing other apps in one account.

Commonsware put up a blogpost explaining what is going on under the hood with this virtualization with a caveat:

However, this sort of virtualization technique – Android apps running inside other Android apps, for an Inception-style experience – requires that you trust the virtualization engine. After all, by definition, it can see all I/O between the app and Android, as it proxies all of that I/O. It is a MITM attack on the app.

So if you trust the makers of Parallel Space (or don't care) it is a option to consider.