The OP is referencing the infamous trials of the four main Red Army Faction left win terrorist defendants in a spectacular trial through the mid 1970s. The West German government built a special courtroom on the grounds of Stuttgart's Stammheim Prison to hold the trials; primarily because of very legitimate concerns that they would not be able to maintain security over the course of the two year trial had they brought the prisoners into the city each day.

Was it just to put the people/terrorists into isolation confinement for so long? Or was it wrong to loosen the isolation and let them correspond?

To be clear, you are possibly conflating several aspects of the story. All of the people tried in Stammheim were caught over a period of months in mid to late 1972. They were placed in prisons across West Germany. Some, like Ulrike Meinhof, were kept in very strict isolation. In her case, she was kept at Ossendorf prison for 8 months, in an empty section of the prison, with white lights on 24 hours a day. By most definitions this was torture; and it had a fairly devastating impact on Meinhof's psyche.

However, a few years later, the government moved all of the main prisoners together into a single cell block on the top of Stuttgart's Stammheim Prison. In almost every way this was a unique arrangment, not the least of which men and women were house together. During the day they were allowed to freely mingle with each other. This arrangement was done mostly to keep the prisoners in a single, controlled place, but it's also important to note that they considered themselves political prisoners and were not interested in interacting with "common criminals" in the rest of the prison.

So the specific housing at Stammheim was definitely not isolation in the sense that some of their previous captivity was.

However, both in Stammheim, and at other prisons across Germany, confederate lawyers who were also secretly members of the Red Army Faction helped pass information between prisons, and also get marching orders to followers on the outside. They also smuggled two guns into the stammheim prison block.

Interestingly, the government passed laws specifically to address lawyers assisting terrorists; and they implemented exceedingly strict search requirements for lawyers visiting prisoners, but they were clearly (and in retrospect) easily circumvented.

But as to your question about "why not just let them correspond". Essentially all of the correspondence that the imprisoned members DID use was about targeting and murdering people in Germany. The Federal government figured they had a duty to prevent further terror, one presumes.

Were they treated fairly or with prejudice?

Both yes and no. In terms of the trial, the case against the four defendants (Meinhof, Baader, Ensslin, and Raspe) was Enormous, and fairly cut and dried. But they certainly did not go through the motions. They also had to contend with defendants interested in using the trial to attack the state, the judges etc. In the end the group essentially accepted guilt (though they did not accept the legitimacy of the court).

Was it legal to hold the trial in public or did the judges just demoralize the accused by showing them to an angry mob?

I don't know what you mean by public, because it was not broadcast on TV. But like in America it was a public proceeding and covered extensively by the press. It would not have been possible to simply close it to the public without a law; and the outcry would have been massive.

And were any laws violated convicting the RAF members?

There were many laws violated, and many that we assume were violated. Meinhof's treatments at Ossendorf prison probably violated International Human Rights laws and standards. The forced feedings of prisoners on hunger strike also likely vioalated laws.

Most clearly though; the Germany government bugged some (or all) of the cells of the prisoners in Stammheim; they claim to have only listed one time (which is, of course, laughable). But in 35-40 years, the tapes or transcripts of any of these recordings has yet to turn up.

Further exploration: check out the German movie from the 80s "Stammheim." Basically a docudrama about the trial. Masterful film.