Pretty standard to offer some leniency in return for information and cooperation. You read about it in some cases all the time. The police bust one guy and his information leads them to the rest of the ring.
However, I have no doubt the police are very very careful what they allow the guy to say and do if he is pretending to be a participant in some online chats, entrapment, etc. The last thing the want is to have the court case reveal that “this child would not have been molested if you had not let such-and-such happen…” (except maybe worse would be if a child dies because of police mis-action.)
it’s kind of tricky because anything the informant does is already illegal. You can’t turn a guy loose and say “enjoy your downloads, just tell us who you get them from”. It’s more of the situation that the guy is caught, is in custody, and they plunk him down in front of a computer to make the necessary connections with the police techs monitoring the whole process. the police aer not going to ignore child molestation or porn in return for somehing else. That’s a CLM - Career Limiting Move.
I assume someone charged with possessing child porn via the internet would be forbidden from using a computer (unsupervised, at least) as part of bail conditions.
As for someone released and maybe also done their probation - why would they admit to police anything that might get them re-arrested? If you are a perennial suspect (as many child molesters or purveyors would be) why would you get anywhere near the police so they might catch you reoffending?