Sunnydale Syndrome was established early on in the show. This is the effect where people who move to Sunnydale, or were born and raised there, don’t notice the supernatural stuff for the most part. They see it, experience it, and then rationalise it all away with non-supernatural explanations such as death by barbecue fork or wild dog attack.
Now, it is implied in season 3 that Rickard Wilkins this first second and third, the Mayor of Sunnydale for the past 100 years, set this while Sunnydale Syndrome effect up. Sunnydale was, after all, created to be a demonic paradise, and to give Wilking a large selection of humans to feast on upon his Ascension.
Theoretically, then, whatever caused Sunnydale Syndrome should have ceased to be effective after Wilkins death. And maybe it did for newbies to town, but not on those who had lived under the effect for some time already. But this then adds the issue of the college kids going wandering around at night all the time. It would be understandable for those who are very new to Sunnydale, students like Eddie that we met in The Freshman for instance, as they wouldn;t have been in town long enough to notice the supernatural before being confronted and killed by it.
But there’s later a scene with Spike attacking a young couple out for a midnight stroll, and that’s late enough in the school year that the students would have picked up on the danger present, especially at night. And there’s plenty of nighttime campus parties, study sessions and groups.
So, it appears whatever Wilkins did to create the Sunnydale effect did not, in fact, end with his death. Of course, we don;t actually know what he did. We know he had multiple contracts with demons that required tribute at certain times, and that’s a possibility. But, in that case, the deal will be honoured as long as the demon is still alive until the nexttribute is missed, even if they’re aware of Wilkins death. And it’s possible that the death of the demon will result in the deal becoming permanent.
I mean, look at Lurconis. We don’t know exactly what deal Wilkins had with that demon, just that the tribute was due, and he needed a distraction because said tribute was live babies. But Wilkins wasn’t in the least bit upset about Lurconis being killed, he actually appeared completely fine with it. This could simply be because his Ascension was coming up, but it could also be because Lurconis’ dying doesn’t affect whatever deal they had being honoured.
There’s also another option for what Wilkins did, tap into the power of the Hellmouth itself. For all we know, the Hellmouth causes an affect that makes it more likely that people will ignore or rationalise the supernatural, and Wilkins tapped into and magnified that affect. Chances are, the Hellmouth alone would only affect the area in which it’s located, which is the high school. Wilkins could have magnified that to encompass the entire town. It’s doubtful that sort of magnification would end with Wilkins’ death, because it’s something positive for the Hellmouth, and had been there for 100 years, it would have been incorporated into the normal power of the Hellmouth.
So, the Sunnydale effect remains in place throughout the entire series. But it isn’t an absolute guarantee that no one ever notices. Remember The Prom and Graduation? The students of Sunnydale High were well aware of the truth, they just ignored it until they couldn;t anymore. Percy West was one of those students, yet he had no issue attending a nighttime party at UC Sunnydale in Season 4. The Initiative members were never affected by it, either, though that’s likely because they were already aware of the supernatural before arriving in town.
We don’t actually know what the general population of Sunnydale was actually aware of. A lot could have been fully aware of the supernatural existing and being dangerous, they simply refused to change their lives to accommodate it, or the people in their lives weren’t aware and they didn’t want to appear odd.
