After successful
sr = isl1208_i2c_set_regs(client, 0, regs, ISL1208_RTC_SECTION_LEN);
sr will be 0.
As a result
sr = i2c_smbus_write_byte_data(client, ISL1208_REG_SR,
sr & ~ISL1208_REG_SR_WRTC);
is equal to
sr = i2c_smbus_write_byte_data(client, ISL1208_REG_SR, 0);
which clears all flags in SR.
Add an additional read of SR, to have value of SR in sr again.