The issue is known, but whether it’s intended is unclear. When the heist was released, one of the bug fixes was:
Fixed an issue where damage would not be correctly doubled when playing a healing effect with Crystalsmith Kangor and Auchenai Soulpriest on the board.
That happened because damage (or Healing) modifiers were being applied after Auchenai conversion, meaning Kangor wouldn’t see the value as healing. This was evidently corrected by moving modifiers before Auchenai conversion. But since Spell Damage is a modifier, it doesn’t see the pre-conversion healing as something to adjust.
It’s likely a more elaborate system will have to be put into place if the intended behavior is to have the best of both worlds. Something like applying modifiers both before and after, but not allowing the same one to apply twice to prevent Velen from quadrupling it. But that’s just speculation, hinging on an assumption of the currently unclear intended behavior. For now this is just how it works.