Good evening,
I am using the same isometric Z as Y setup as the 2d-techdemos IsometricZasY scene. However, I am experiencing similar issues that are exhibited in this scene that basically break it for me. I was wondering if anyone knew the solution to this weird sorting issue, especially @ChuanXin if possible. I have had little to no luck solving this issue. Please help!
The Z position of the Player_Isometric_Witch GameObject may have been set too high for such positions. You could try lowering it by 0.1 per height level (eg. 1.9 on the ground) so that it works better for such areas. We will check through this demo project again to make this better!
I’m not sure that would make much of a different sadly, I’ve tried using multiple Z levels and I can’t seem to find a logic behind it. We were unable to find any solution to reliably sort the sprites based on their Z position and all of that. 
If you decrease the height, it will start clipping into other tiles on the ground possibly, which is back to square one
I guess the custom axis sort is not a perfect solution for this unfortunately. In order for it to work, quite a bit of work needs to be done to handle this properly. This includes preparing the Sprite assets such as splitting the larger art assets to sort properly and setting the correct pivots, and even then there are situations where the sorting breaks as you have seen above.
If you could share some examples and screenshots of your use cases regarding sorting, we will try to help out with this! Thanks!