"However, if one were to go strictly by Mr. Lichello's words, there would be no Margin allowed in AI. On pages 197 and 198 of the Third Revised Edition, he states clearly that he is against it. I take it that Margin would have to be removed from AI in accordance with the AIM book."
Margin is not enabled when using the Lichello Models in AI and therefore you cannot get into a situation where there is negative cash.
Margin is an addition to AIM BTB much like MACRO, MattMod, Vealies, Volufilter and such. To reiterate, when using one of the Lichello models, AI follows AIM BTB exactly.
However it also allows users to use AIM enhancements of which Margin is one. Therefore Margin does not need to be removed from AI, no more than MattMod or MACRO does, in order for someone to use it BTB -- simply select a Lichello model when setting up portfolios.