Angle formed between a satellite, a ground station, and then another Satellite
This figure from
Wikipedia:Spherical law of cosines
applies if the ground station is at the center of the sphere, 
u is the ground station's zenith, and v and w are the apparent positions of the satellites as seen from the ground station.



Then a and b are the satellites' zenith angles, i.e. 90&deg; minus their elevation angles.
C is the difference between the satellites' azimuths, and c is the angle you want.

Using the cosine rule for sides
$$\cos c = \cos a \cos b  + \sin a  \sin b  \cos C$$
and the rules for sines and cosines of complementary angles,
the expression in the question looks correct if the absolute value operations are omitted.