Low-dose high-energy ion implantation is effective for isolating GaN high-electron-mobility transistors (HEMTs). However, lateral penetration of implanted ions induces damages at sides of AlGaN/AlN/GaN HEMTs and causes parasitic channel formation. By comparing ion implantation isolated HEMTs with varied widths, the parasitic channel behavior is characterized: the parasitic channel shows low on-state conductance, reduced gate current, and more positive threshold voltage compared to the active HEMT channel. The high N ion implantation energy for HEMT isolation was up to 375 keV, and the effective widths of HEMTs are narrowed by \textasciitilde{} 0.5 µm. The electrical characteristics of the parasitic channel are theoretically understood by considering ionization of point defect generated in the AlGaN/AlN/GaN heterostructures. Graphical abstract: [Figure not available: see fulltext.].