What does Isaiah 1:27 mean?

Jerusalem during the time of Isaiah has become a place of injustice, plagued by corrupt officials (Isaiah 1:23). The Lord has declared His intention to restore Jerusalem to a place of justice and righteousness, with faithful judges and counselors. This will come after a time of purging away those who are unfaithful as a metalworker burns away the impurities from silver (Isaiah 1:25).

Now Isaiah says that the outcome for those now living in Jerusalem will depend on their actions. The Lord will return justice to the city by justice. That is, He will redeem His people by bringing destruction on those who deserve it and sparing those who have been faithful. Isaiah is holding out hope to the people, stating that repentance will lead to redemption and not destruction.