Conflict or not, but never it happened that a character invited by Luffy and going through bonding phase with SHs, end up being part of an antagonist faction.
Infact, him part of Grand fleet makes no sense as well because we already have Elbaph representation there - Hajruddin who took oath as well.
Now, Haj simply can't make Loki be leading that alliance because it was Haj who took that oath along with 6 others and SHs to form Grand fleet.
Blackbeard being the main villain of this part of the story could mean Loki would fit nicely in the battle.
The main villain being the WG and navy , would make Loki joining Luffy's crew not necessary except for pure strength.
In the current chapters it shows Elbaph and the celestial dragons vs the Davy clan.
Luffy's blood line is involved in the whole incident, Rocks left on bad terms with Harald.
Will the holy knights be successful in making Elbaph into those kingdoms in the present?
Though, the Elbaph giants are allying with the straw hat pirates.