a tiny breakaway group called the Malachim. However, they were extremely insular, enough that it is unlikely that they would ever have found themselves anywhere near someone like Reuven Malter.

The Malachim, while small and extreme, were not that isolated in the prewar and war years. As you mentioned, there were very few (proto-Yeshivish/Chassidish [1]) Yeshivas in the US back then and he worked in Torah VeDaas almost until his passing in the late 30s. So you had people who were probably left-wing Yeshivish/Modern Orthodox attending the same school as (what passed as) hard-core Chassidim.

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PS. Could the book be about the Malach?

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[1]. The only ones that come to mind are Torah VaDaas, Chofetz Chaim, MTJ and Chaim Berlin. Generally, the few Lubavitchers in America learned in Torah VaDaas - which had a more Chassidic flavor back then (Shraga Feivel Mendlowitz was born Chassidic).