The angel can be negated, unless it's CBI/N. That would cause an instance of SI on the evil War in Heaven, so that part is legal. It still winds up the same way - all the good Enhancements in battle, all the evil Enhancements in discard.
Also, after each good negate, you need to determine initiative by the numbers, not just the last one. Based on the numbers of the ECs, it will usually go to them.