the papal states is a special kind of faction called papal_faction and has its own unique mechanics which were recycled in the Baltic campaign to represent the emperor.
this made sense as most of Frankia were outside the map.
there is a small campaign-script that sends the character "Pope1" of-map and freezes the AI to make the faction static and merely use the mechanics.
making this faction active would have undesirable effects, so would simply deleting it from descr_strat as it is called by the script with reference to this named character.
if i remember correctly there is also a script that give HRE excellent relation with the papal state, ensuring that he will accept a request for crusade.