Yes, as you can see, there is already a change request for this. But not because "most applications don't understand tx_isolation". Most applications do understand it, because it's an old variable which has been there for a very long time. The request has been made to make the option/variable naming more consistent and transparent for a human being.
I guess you developed your application based on MySQL 5.7 which started deprecating the tx_isolation variable and renaming it into transaction_isolation, and you didn't implement processing of the old name, that's the only reason I could think of why you'd be having this problem. That's certainly not the case for most applications.
There has been no change. transaction-isolation has always been a server option (command-line or config file option), while tx_isolation – a system variable.
Here are the oldest versions of MariaDB and MySQL that I have handy:
| Variable_name | Value |
| @@version |
| 5.5.23-MariaDB |
| Variable_name | Value |
| @@version | @@version_comment |
| 5.5.62 | MySQL Community Server (GPL) |