William, then three, vanished from a home on the NSW Mid North Coast in 2014, the case sparking an intense police investigation and public concern for the child.

Legal restrictions prevented the publication of the fact that William was in out-of-home care at the time of his disappearance but a NSW Supreme Court judge has said the matter was of "legitimate public interest".

There are almost 20,000 children in out-of-home care in NSW but state legislation provides certain restrictions on publication of their names and identifying information.

In his ruling in January, NSW Supreme Court of NSW judge Justice Paul Brereton noted there was "substantial public interest" in the integrity of the out-of-home care system.

In making his decision, Justice Brereton also raised "the tragic probability that [William] is no longer alive".

"Moreover, the truth has to date been obscured: the public has admittedly been given to think that [his] carers are his parents," he said.

"There is a substantial public interest in accountability and scrutiny of the out-of-home care system, and in accuracy of reportage of the circumstances of his disappearance."

The decision was upheld by three judges of the NSW Court of Appeal on Wednesday.

Along with the legal complications, William's foster parents were also reluctant to expose his siblings to public scrutiny.

"It's important because there are children involved and they're young. They deserve an opportunity for privacy," his foster mother said in 2015.

"They deserve to grow up as individuals and not grow up being known as the brother or sister of the little boy who went missing.

"So if our faces are known by the general public, if we walk down the road, people will know by association who William's sister is.

"It's not fair. It's not fair to them and we're not doing it for us, we're doing it for the children."

Dressed in a Spiderman outfit, William disappeared from the garden while visiting members of his foster family in Kendall on September 12, 2014.

There is no suggestion that either William's biological or foster families were involved in his disappearance, have any knowledge of his whereabouts or are at fault in any way.

The state government announced an unprecedented $1 million reward for information leading to William's whereabouts on the second anniversary of his disappearance.

At the time, police said they were continuing their investigations in the hope William was still alive.

"The Department of Family and Community Services (FACS) was deeply saddened to hear about the disappearance of the child in 2014," a department spokesman told AAP on Friday.