You are correct regarding SIGINT, that allies don't mind being spied upon. What they do mind is when they themselves are being spied upon. Like Merkel's phone being tapped. Or the US recruiting on ground assets in Saudi Arabia.
That's what SIGINT is.
> Like Merkel's phone being tapped.
Which is an example of SIGINT. And it was leaked which is why it became an issue. World leader's are always surveilled.
There's a certain level of aggression you use against acknowledged enemies that would be awkward if exposed against allies, that is not to say it doesn't still happen.
It most certainly is https://en.wikipedia.org/wiki/Jonathan_Pollard