I don't see how not wanting Street on stage would equate with his initials not appearing on a sleeve he co wrote. Maybe Morrissey's post Smiths stage appearance was more about performing live with musicians he's worked with before and showing the audience that he was here to stay by presenting everyone that was in The Smiths apart from Johnny Marr. As in we don't need Marr.
If he was really against showing Street as part of the gang he never would've put him in the Playboys music video.
It's not Street's initials. It's a symbol related to the justice system on the cover of a song about criminals. Makes much more sense.