A "spy" gathers information, and (with few exceptions) nobody wears a uniform, or carries ID. That "friendly merchant" you're chatting to could be selling information to anybody...
There are several groups that would be expected to gather intelligence. In fact, it would be more difficult to think of groups that won't be trying to get information about their neighbours/rivals/enemies
Badges (looking for criminals and potential criminals)
Ballooners/Merchants/Shipmen/Wanderers (trying to get information on markets and safe areas)
EmDees (new and interesting diseases/cures. Information on "Public Health")
Frozen Chosen and Inquisitors (Are you a convert? If not, why not?)
Overlords (Tax-gatherers need to know about their population)
Universities (the remnant/traditions of Academic interest? The usual needs of government)
All of the above might provide "cover" for the KFS Secret Police, or whoever the PD is using as primary antagonists
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