Something I just recalled that might shed light on the exact relationship of Blackstaff and Council: in Turn Coat, after Harry learns what's going down, he travels to Edinburgh and finds Ebenezer waiting, along with a strike force of Wardens, waiting for news to come in so they can capture Donald.
Eb is no longer a Warden, but he's right there with the strike team and everybody takes that for granted as natural. That suggests to me to that the Wardens, at least, know what the Blackstaff is and who it is and what he is allowed to do.