This is just a guess: Do you specify DSN=, or use a DSN-less connection string? If the former, try the latter with explicit Driver= and IsolationLevel= parameters in the string.

Another possibility is your connection is going through the nightmare called sp_tsql_environment which does a SET TEMPORARY OPTION isolation_level='1';

If so, then take control by coding your own login_procedure that does NOT call sp_tsql_environment.

Full story:

The default login_procedure option is this: SET OPTION PUBLIC.login_procedure = 'sp_login_environment';

That forces all your connections to call this...

ALTER PROCEDURE "dbo"."sp_login_environment"()
begin
  if "connection_property"('CommProtocol') = 'TDS' then
    call "dbo"."sp_tsql_environment"()
  end if
end

Some of those connections then call this evil procedure:

ALTER PROCEDURE "dbo"."sp_tsql_environment"()
begin
  if "db_property"('IQStore') = 'Off' then
    -- SQL Anywhere datastore
    set temporary option "close_on_endtrans" = 'OFF'
  end if;
  set temporary option "ansinull" = 'OFF';
  set temporary option "tsql_variables" = 'ON';
  set temporary option "ansi_blanks" = 'ON';
  set temporary option "chained" = 'OFF';
  set temporary option "quoted_identifier" = 'OFF';
  set temporary option "allow_nulls_by_default" = 'OFF';
  set temporary option "on_tsql_error" = 'CONTINUE';
  set temporary option "isolation_level" = '1';
  set temporary option "date_format" = 'YYYY-MM-DD';
  set temporary option "timestamp_format" = 'YYYY-MM-DD HH:NN:SS.SSS';
  set temporary option "time_format" = 'HH:NN:SS.SSS';
  set temporary option "date_order" = 'MDY';
  set temporary option "escape_character" = 'OFF'
end

If you NEVER want that to happen, try this:

SET OPTION PUBLIC.LOGIN_PROCEDURE = '';

Or substitute your own code:

CREATE PROCEDURE DBA.my_login_procedure()
BEGIN
  -- do whatever you want
END;

SET OPTION PUBLIC.LOGIN_PROCEDURE = 'DBA.my_login_procedure';

What version do you use, v16 or v17?