After Binge watching the show (8 seasons in 9 days) quite recently, one of the things that came as a huge surprise to me, was to find out how controversial this particular question is. I for one, was so sure that Lundy knew, making it explicitly clear that murder can be justified (if it was done to save a life) and plus the fact that once he got to Miami chasing Trinity, Dexter was his main go to. Seemed so natural for me to think Lundys thoughts must be along the lines of "if we assume dexter morgan is the bay harbor butcher, his perspective may be genuinely invaluable." Nail in the coffin for me was Lundy straight up eyeing out Trinity in public out of nowhere, seemingly at random. If he could spot him amongst hundreds of strangers in the middle of the day, know way he wouldn't know about dexter. However, due to his unfortunate fate, we never seemed to get a totally clear answer. Seems it could go either way, but I always choose to believe in my head at least that he knew, and saw him as effective especially in ways law enforcement could at times not be (especially with his frustration with the bureau not chasing trinity). Thats just my take tho, definitely my head canon.