I can understand your concern.
All agencies are supposed to handle all applications in confidence. It´s not just against a moral code but it´s bad for business not to. Talent is a commodity just like money these days, and competition is stiff to get the right person.
However, humans are just that - human. Humans make mistakes and they accede to temptation. Agency codes of practice are not as strong or binding as something like the Official Secrets Act.
Two things here, one is that there are literally hundreds of agencies out there, so unless this agency is working with a specific employer, or marketing a specific vacancy that you want, perhaps choose another agency to go with.
The other is that you can be overt about your concern. Front up the agency person you´re dealing with and say, there may be people in your agency who are acquainted with people I currently work with. Please can you give me your personal assurance that my details will stay confidential?
Getting a personal undertaking ups the moral obligation - it draws into specific focus that confidentiality is important to you. If they won´t give that obligation openly, willingly and without making you feel like a fusspot, don´t go with them.
Hopefully, I will be posting some job hunting tips here soon. I´m putting together a website for job hunters, so I hope GBers won´t mind me testing more material out on them before it goes live!