Everything about this combo works the way you’re thinking except paying life and the way that matters with
Angel’s Grace. Because paying life isn’t prevented by
Angel’s Grace (as others have mentioned), you can only pay 1 until you get down to 0 life. At that point the combo stops being repeatable, because you have no life left to pay with (you can’t go into the negative to pay costs, you simply have zero and therefore nothing to activate the ability with). Scryfall’s ruling note is only talking about what happens when your library shrinks (and assumes you still have life to pay with to keep repeating).
You still won’t die until the end of your turn because
Angel’s Grace prevents you from losing during your turn, however once your turn ends you will immediately lose as a state based check.
That being said, I like your combo idea, because it works. You can do all of this stuff, cycle all 20 (or more) HPs, activate the abilities to gain it all back and blast your opponents who WILL die before the end of turn (which is also state based) if they are below zero and you can win the game without your turn completing and you losing. (Which in theory you won’t lose anyways because you’ll have gained back up to 20.)
It’s super janky but doable. You just can’t go infinite without an infinite life combo out as well. It’s also like a 3-4 card combo, which can be tough to pull off. Most people will never see it coming though, which is what makes it very doable.
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