The U.S. was small in population and militarily weak. At the same time, we were even then a trading nation, very important to our economy.
The British and French were in the middle of the Napoleonic Wars, the latest round in centuries of warfare between the two.
The Federalists and Democrats were fighting viciously over their pro-Brit and pro-French views.
Washington saw steering clear of the European war and maintaining commerce with both sides as a vital U.S. interest. He also hated the bitter partisanship that was emerging and argued for American unity. The last thing the new republic needed was to be closed out of the market of either Britain or the Continent, or even worse, be dragged into an expensive war. We didn't need to pick a centuries-long feud like Britain and France had.
During the Revolution he had no problem with "foreign entanglements" in the form of Dutch money and a French military alliance. I doubt very much that he would be an isolationist today under very different circumstances, especially when internationalism fosters the very commerce that Washington understood then, and still is, a foundation for American prosperity.
The postscript is that the pro-French Democrats eventually got is into a war with Britain, the War of 1812, a war so stupid that no-one could even come up with a name for it.
Actually, the context is not controlling on the enduring wisdom of the philosophy. One that transcends time and space.
Your implicit argument that it is dated philosophy is in fact errant. And George Washington certainly did exploit foreign help when useful. And pledged that we should abide by what deals we had then and subsqeuently made pursuant that help.
But he said that "let us stop here." He was advocating for a restraint that would admirably serve the Republic if pursued. He recognized the hazard to our form of government to unrestrained entanglements. That special interests would overwhelm and crush domestic voices and hence override our national interests... making our own government a servant of the foreign. Still true to today.
E.g., China, Saudia Arabia, UAE, the U.N. and WTO etc.
"...the War of 1812, a war so stupid that no-one could even come up with a name for it."
LOL!