I think this is a bug (or at the very least should be corrected). I have installed the latest version of Blogs Directory and all the blogs on my multi-site install are now displaying on the main site. However, that also includes Deactivated sites. When you click the link in the Blogs Directory it takes you to the WP Error page that says this user and elected to cancel their account.
I think it is just basic logic that would say these sites should not be displayed in the Blogs Directory and it should be a relatively simple fix.