With regards to the Silver Covenant they are an Alliance faction that falls under the Alliance Vanguard in Wrath of the Lich King led by an Alliance orientated High Elf in Vereesa who is unfriendly at best towards the Horde. They are against the Sunreavers and any other Blood Elves/Horde membership of the Kirin Tor and actively assist the Alliance forces. Its similar to the Aldor/Scryer situation where both hate each other but do not openly assault the other. The Silver Covenant is Alliance, the Sunreavers are Horde, Dalaran is neutral. Inside Dalaran sections of the city are not allowed by the other faction because they are both working against the other, its the same way Horde/Alliance works together against larger threats like the Might of Kalimdor.
The Silver Covenants role in Wrath and Mists was purely Alliance. Their role in Legion was separate to that of the Kaldorei and Sindorei in that they were a significant force but not specifically aligned as they were before. I would still class them as Alliance even if they haven't been seen in BFA.
The Silver Covenant is the largest, most defined and most unified group of High Elves. Blizzard could quite easily set their position in the Alliance with Alleria and Vereesa working together.
Most of what we say though is just repetition now. There is no lore reason as to why High Elves cannot be added for the Alliance. Blizzard doesn't want them to be added even if I personally want them to be. I do find it impressive this thread is still going as it shows the passion people have for this race which fits all expected criteria of an Allied Race.