User blog comment:B214/Question and Answers 4/@comment-24866657-20141019162746/@comment-73.178.133.185-20141020163402

You know, I think everyone is overlooking some things. FIrst off, the simple answer is that Ishibumi forgot that those powers were demonic in origin when writing that scene (and we weren't supposed to notice). However, for an in-universe explanation you just have to look at the source of his new body. His flesh was that of Great Red's, who represents "dreams" -- in other words "imagination". Thus, while Issei's powers were normally demonic in nature, they were recreated by his new body's natural draconic power.