Last time I checked, an LLC could elect to be seen in various different ways by the IRS (e.g. corporation, disregarded entity, etc.). Unfortunately italicizing one of the words in the expansion of an initialism doesn't really tell us anything about its meaning.

I think the general principle still applies though. And even without the tax analogy, acting as an agent of the government does not get rid of the responsibilities of the government in the behavior of their contractor, which is why the government can't simply get around the Fourth Amendment by having a contractor (or allied intelligence agency) do the search for them.