I assumed there was always a tacit understanding, since ending up in the Loveless is more or less a one way ticket it makes a perfect way to acquire goods and materials and labour that will not be scrutinized or questioned, as opposed to say stealing children off the streets. The arrangement is also useful is that it allows the Majikar to play both ends of the game, they incentivize high rates of criminal kidnapping and human trafficking, with their up river slave trade, create lots of heinous criminals, who the authorities catch and shove into a prison where the Majikar get to use them for whatever they will in the in city labs, (the place in the Wastrials).
In other words, the tunnels are not new, there has always been that dark (darker) side to the Imperial Prison which has more or less always served the needs of the necroengineers and scientists.