@arnonm
Before discussing what might go wrong with Main Deco in AP mode, I want to say that it is usually OK to run Deco mesh in Router mode, even if it is connected to ISP router. There are very few scenario where that won't work and you'll see rather quickly if one of those is on your home network.
Having said that, I do run my Deco mesh in AP mode since the beginning, and prefer that.
When you switch Deco mesh to Access Point mode, your Main Deco is a wired client for ISP router, just like PC with Ethernet card. Main Deco will query ISP router for IP address, and it'll run Internet health check which is to resolve few host names to IP addresses. As long as it is successful, Deco LED will be green and everything should work.
If not, Main Deco will show red LED and will self assign default IP address to itself, just like PC would if PC can't get IP address from the ISP router.
We can exclude Main Deco hardware issues, because you said it runs fine in Router mode. It also makes sense to exclude issues with Deco Internet health check, because I would assume in Router mode it is the same. Still, check if your ISP router maybe configured to deny some DNS queries.
Other than that, it becomes the question: why would not Main Deco connect to ISP router and if it does, why would not it get IP address from the ISP router? I don't know your home network and ISP router configuration, but I can think of two common scenario:
1. Main Deco is physically disconnected from ISP router - you are saying it is not the case;
2. You whitelist every device on your home network, connections from devices that aren't on that whitelist are denied by ISP router. If this is the case, you will be surprised to learn that in AP mode Main Deco may use different MAC address when it connects to ISP router.
In case these both scenario are not applicable, you will need to check on your ISP router what does it see for Main Deco. If your ISP router does not provide logs and does not report status of connected devices, that may not be possible.