Hello and welcome to the FIFE community!
As for your questions I believe FIFE would provide a solid foundation for your type of game. It can certainly handle the 2d isometric RPG aspects. The MMO side including: networking, server/client, synchronization between clients, instancing, persistence, etc. will all have to be things you code yourself as FIFE does not provide direct support for these. Also a sandbox type of game requires a lot of user control and flexibility from your game so that will be something to keep in mind. FIFE itself is fairly modular so it should be able to handle a sandbox style. Performance could be an issue with really large levels with lots of data, but if you are smart about how you organize the data it should not be a problem.
Good luck and we hope you keep us informed of your progress.