Integrated sensing and communication (ISAC) is a promising technology for future mobile networks, enabling sensing applications to be performed by existing communication networks, consequently improving the system efficiency. Millimeter wave (mmWave) signals provide high sensing resolution and high data rate but suffer from sensitivity to blockage. Cell-free massive multiple-input multiple-output (MIMO), with a large number of distributed access points (APs), can overcome this challenge by providing macro diversity against changing blockages and can save energy consumption by deactivating unfavorable APs. Thus, in this work, we propose a joint dynamic AP mode selection and power allocation scheme for mmWave cell-free massive MIMO-ISAC, where APs are assigned either as ISAC transmitters, sensing receivers, or shut down. Due to the large size of the original problem, we propose three different sub-optimal algorithms that minimize the number of active APs while guaranteeing the sensing and communication constraints. Numerical results demonstrate that assigning ISAC transmitters only satisfying communication constraints, followed up by sensing receiver assignment only for sensing constraint achieves the best performance-complexity balance.