You work from local databases. You keep a migration script that sets up the schema and another migration script that sets up the data. If you create a feature, you must add to each script when merging.

You can run unit tests by creating transactions, running the test, and then rolling back at the end.

I do get your point, though. It's more convenient to be able to mock your database from your code.

Isolation I guess? I don't know what your experience is and why you think it cannot be anything but slow but... it's not?

pgtap lets us unit test our SQL functions, triggers, views, etc. It's integrated with our change management system. It's fast enough and works well.