Sayeed Salahudeen is an Indian National and I should say Indian traitor, but he is not a terrorist in Pakistan, he is very welcomed and seen as a political activist in Pakistan. That is why Pakistan sees no issues in promoting his anti-India agenda through its official channels.
Its very important to note that Sayeed Salahudeen started his activities as a peaceful political separatist movement. And he contested in elections in 1987 in J & K, but after he lost to National Conference, and due to his violent protests, he was arrested and released in 1989, he joined the armed movement. Until then he was called as "Mohammed Yusaf Shah".
In 1995 he crossed LOC and since then he remains in Pakistan, of course he crossed border illegally, several times he appears on television, several times government of India has demanded for this person, but the government of Pakistan does not give this person to India. The reason is simple, this person is a very aggressive spokesperson for Pakistan government against India. Why would Pakistan government afford to lose such person?
As far as Pakistan citizens are concerned, every country has good and bad people, every country as moderate and extremist people. The problem with Pakistan is, the broken democratic system. Look at the history of our that neighbor. Since they broke from us, they could not survive peacefully for one complete decade. The army, government, and the notorious intelligence agency ISI, all interfere in each others work, and in past few years, we have seen that even judiciary is being attacked by government. The ground reality of that country is, no one knows who is the real ruler of that country, and extremism is the superior force. The good citizens of Pakistan are the victims of this mess. Unless Pakistan has a strong democratic government without any external interference, independent judiciary, neither Pakistan can live in peace nor they would let us live us in peace.
Edit:
@Zonair, India does not interfere in any Pakistan internal matters including Baluchistan, and believe me the day the India interferes in India Pakistan's internal matters, 1971 will be repeated, hope you remember Pakistan had a peace of land that it claimed as "East Pakistan". Baluchistan and Indian interference is a false propaganda by Pakistan as face saving exercise by Pakistan government, the reality is Pakistan's interference in Indian internal matters, and that entire world knows with proof of 26/11 where Pakistan's sponsored attackers spread terror, and Kashmir where Pakistan has not only illegally occupied Indian land, but also spreading terror every day.
May god give you peace.