Confidentiality exists so that a patient can open up and get the help they need in a safe and accepting environment where they will not feel paranoid or that they might be betrayed. That includes being able to open up about crimes. The patient-counselor confidentiality right should continue to be respected so that patients can heal and possibly avoid future crime.
No, confidentiality in counseling should not apply when a patient admits a crime, because it is more important that the truth is found. Especially if there are victims involved, the person should have to pay for the crime they committed. They should not receive treatment without admitting to what they did.
I do not think that the confidentiality in counseling clause should apply when the patient admits to crime. I think that the couselor has a moral and lawful obligation to report any such crimes committed by their patient or patients. I think that such a disregard to the law would be harmful to everybody.
For the most part, yes, it should. We already have exceptions in place for counseling and therapists. Admit to a capital crime (the legal term for murder with intent) and you'll get reported. Admit to a crime against a child, and you'll get reported. Any sex crime? Reported. The system works well in that way.