If you are using the vise, slightly different.
Yes, your mill head needs to be square to table both r-l & f-b.
Start out the same. You can use feeler gauges, scrap sheet metal, (3) 123 blocks, anything for shims. After first 4x4 surface cleaned up, clamp that down to table and cut opposite side T surface.
With those 2 surfaces now parallel, you can go to the vise and speed things up. If it won't quite fit in the 4" vise, take the moveable jaw out. You won't have any raw surface in contact with the half hard moveable jaw mounting surface, so won't be damaged. Place the 4x4 milled surface against fixed jaw, raw T surface down on bottom of vise, unmilled 4x4 surface up. Place 2 small dia dowels or soft stock at widest part of lower T edge. This will help balance the top surface r-l, but more importantly allows the part to pivot so completely square to fixed jaw. Mill the top raw 4x4 surface.
Turn part over with just milled surface down, same first milled surface against fixed jaw, no dowel pins or spacers under bottom. Mill top T surface.
Keeping same first milled surface against fixed jaw, place one raw L surface down on small dowel or spacer. You can secure indicator to spindle and indicate the other now vertical 2nd milled 4x4 surface top to bottom using the quill travel (probably less than 4", so as close to zero over actual travel range as possible), or you may be able to hold a good square up the milled surface so no light visible top to bottom. Final tighten vise and mill the top L surface.
Keeping same first milled 4x4 surface against fixed jaw, place milled L surface down, no dowels or spacer, tighten vise, and mill last surface. You new angle plate / square will be as good as your vise if you head is square to table.
I would probably use the 1 1/4 cutter. Better to have 2 teeth than 5, and even with the 2" one you will need to make passes to cover the 4" surface. Since you head will probably not be square to table in f-b direction, the 1 1/4 will minimise the out of square slightly over the 2" one. Will need to make 4 passes with the 1 1/4 cutter.
As with any small tolerance milling, keep the inserts sharp. Even if that means indexing before each final cut.
Also best to keep your quill nut jamming the quill full up so no chance of it dropping while cutting (even .001 drop will mess things up).