How would circle of protection evil work in regards to a sliver of a shadow diety possessing a person/beast.
If the deity is evil, it fails.
That 1st level spell can negate a dominate monster spell (9th level) and is the reason for "suspiciously neutral" enchanters.
Deific magic isn't necessarily restricted or stopped by Protection from Evil. It's up to you, or your GM if you are not the GM.
The magic of deities isn't stopped by null-magic or antimagic zones either, so you just have to decide for yourself. Depending on how "deific" the "sliver" of this shadown god is would determine whether or not its power is stopped.