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I spent a long time in Phantom Blade Zero searching for the Backstreet Courtyard Key, convinced it would unlock the inaccessible area where Old Man Gen’s house is located, as well as the third acolyte scarecrow. Turns out, that gate doesn’t lead to either.
If you’re searching for that key with that in mind, you instead need to acquire the Flaming Mane phantom edge from the region boss and follow the main quest to repair it with Lei Dang, then use it to burn the barrier by the Pond of Fading Song bell where you fought Gu Wanyue, The Wailing Wraith. This leads around the back and lets you access both quest locations.
Now, if you’re here because you’re genuinely interested in the Backstreet Courtyard Key, you won’t get it until you reach the Mountain of Imprisonment area. Speak to the couple near the Shrine Outer Gate, complete the Ledger of Atonement quest by finding the ledger in the caves below, and then speak to the woman there to start the Bai Xue quest, getting you the key. The location is mainly relevant to this specific quest and doesn’t hold much value beyond it.
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If you’re wondering how to reach the Mountain of Imprisonment, you’ll need to complete the Illusory Pipa quest first.