When Isaac confronted Pete they were standing in front of a mirror. Isaac was very visible in the mirror.
Isaac wears his hair down for much of this episode, but it's already been established the ghosts quickly return to their original "dead" appearance a few seconds after changing it. However, it's possible that what triggers the return is that the ghost has to drop what they've changed (examples include how Pete's wife had candies in her purse, but if she tries to give them away they revert when she lets go, or when Pete removed the arrow that letting it go returned it, or Hetty had to hold her phone cord to rescue Flower last season). In this case, Isaac is holding his hair tie in his hand the whole time.