Bacon is not "processed" in the normal sense of the word. Salami, bologna, hot dogs, etc., are indeed processed: they are ground up, chemicals added, and formed into the required shape by forcing them into a machine.
Bacon is, for the purposes of this little discussion, minimally processed. It is cut off the hog, brined, etc., then packaged. (That's simplistic I know but compared to a hot dog, it's minimal.)
For those worried about the nitrites, they're not as bad as one has been told. (Remember, Conventional Wisdom and The Government are always wrong.) Another ingredient usually found in such meats is a chemical whose name I cannot remember but it is Vitamin C, or a form of it, and it reduces or eliminates the harmful effects of the nitrites. (Besides, with the advent of the FDA, the amount of nitrites added to foods have been drastically reduced from what was historically used.) If one is still worried about the nitrites but still love bacon, just take a couple of tabs of Vitamin C before you eat it.
Now, I am NOT saying all these added chemicals are paleo but there is no harm in having a handful of bacon every now and then. (I'm not even sure pork, in the mainstream of evolution, is paleo.) Our bodies are too efficient at protecting us from ourselves to let a bit of extraneous additives harm us.