If they did sanction such things, they'd never admit it. If they didn't, it does them no good to comment on this, or
anything, one way or the other. There's no benefit to asking them and no benefit to answering.
We know Epstein was a genuine pedophile. It's not impossible that his actions were his (and Ghislaine's) own. Maybe he was trying to blackmail people for his personal profit, or maybe blackmail wasn't part of it. Maybe he saw it as a way of sharing his "hobby" with people he liked and wanted to get to know more, partly to acquire clout and connections and partly because pedophilia was his passion and something he considered worth doing with others, just like some rich people invite other rich people to go golfing.
There are so many possibilities. Maybe the above is true but he was also an intelligence asset. Maybe he was an asset but the agency/agencies involved weren't aware actual underaged people were involved and dropped him after his 2008 arrest and he then just continued for his own pleasure. Maybe he really was working for one the whole time and the people responsible thought the ends justified the means. Maybe he wasn't and essentially was trying to run his own private intelligence agency, perhaps to sell information to other intelligence agencies, and companies and people who would pay a lot for that dirt.
There's no evidence of anything concrete either way. The prosecutor saying he was told to back off and that he belonged to intelligence is what really sparked all of this, but the meaning of this is still unclear. If the person who told him this wasn't lying, it definitely could mean he was an asset all along, or it could mean that intelligence agencies weren't aware of him until his arrest and realized the potential of the information he might have and promised him leniency if he informed them about every important individual involved, then stopped dealing with him after he was sentenced.
If this is true, this sort of thing isn't uncommon with mass murderers - look at Sammy the Bull. The fact that he kept doing it for a decade when he got out, the unknown sources of his money, and other weird factors certainly could be seen as additional evidence of his actions being sanctioned by some sort of intelligence, but it could mean other things, too.
It's all just speculation.
We also honestly don't know if he was murdered or killed himself; or if he killed himself, if he was permitted or encouraged to do so or if it really was just an ordinary suicide (he'd certainly have strong motive to kill himself). Maybe the base rate of incompetence is so high in that prison that this could happen; maybe 1/3 of the other cameras weren't working then, either, and maybe a lot of guards were slacking off and faking data for years.
Most people seem to jump to the most extreme version of all of these possibilities, but we have almost nothing to go on. Maybe we'll learn the answers someday, but who knows.