Both the Unholy Sanctuary and Mistlock Singularity activate upon taking a death blow, but Unholy Sanctuary puts you in shroud so you don’t actually die. The Mistlock Singularity still activates and heals 25% of your HP, except you were never going to take a death blow because of Unholy Sanctuary.
The heal works and the activation works, but the activation is quirky since you were not going to die. Instead it just feels like a wasted heal and would be better activated when a necro has too little life force to enter shroud.