Police have broad discretion over who they charge and do not charge with crimes. If you are interested in seeing that the CI is charged with a crime, you can take it up with the State's Attorney.
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There is nothing legally improper about the situation you describe and nothing jumps out about it to suggest that the informant would not be able to assist the police or, if necessary, to testify in court. The credibility of an informant who testifies, like that of any other witness, is for the judge or jury to determine.
Happens frequently. Usually it's "we won't charge you" if you give us x number of arrests. Then the officer lets the CI rat people out. Oh and since the cop isn't bound by his word they can keep stringing the CI along for more and more information. Better that someone eats their charge or works out the deal with the SA's office instead of an unscrupulous officer.
This message does not constitute legal advice, nor does it form the basis for an attorney client relationship. Paul M. Marriett is licensed to practice law in Illinois and Florida, and due to various changes in the law this message may not be up to date with current statutory requirements.