OK I found a description of using the response assistant here in the LISA tutorial (about half way down)
it appears it reruns the reduction of whatever spectrum data is currently set up in ISIS, but without a flat correction.(This is all hidden in the background) It then combines this with the flat and the reference spectrum (which has to be of the same object which ISIS has reduced in the background) to produce the instrument response. This is effectively the same as the usual “long hand” way of doing an instrument response but with some automation. It does seem a slightly confusing way of going about though. All very odd !