Not just during the world wars. British intelligence apparently faced the same dilemma when infiltrating the IRA, and some of the results were quite ugly (look up Stakeknife if you're interested).

Very true. Though Stakeknife was also used in a way to remove hardline individuals seen as problematic to the more pragmatic parts of the Republican movement who were open to negotiate and protect other sources higher up. With obviously terrible consequences for many innocent people.

There's a podcast series called "Hunting Warhead" wich documents how the largest child abuse site (sadly had over a million members) was taken over by law enforcement. It turns out they carried on running the site for about a year, even posting child abuse images themselves as the admin to maintain legitimacy. Definitely a moral gray area there. Great podcast series but also made me feel sick and keeps creeping into my head periodically..

EncroChat realised a couple of weeks ago and warned their customers https://www.vice.com/amp/en_us/article/5dz9qx/encrochat-hack...

Same problem as planting an officer into a criminal org. Presumably the agent has to witness and commit crimes until they've infiltrated deeply enough for their mission