Given $F(\phi, \nabla \phi) = |\nabla \phi| \delta(\phi)$, the Euler-Lagrange can be written as:
(Eq. 1): $\frac{\partial F}{\partial \phi} - \nabla\cdot\left(\frac{\partial F}{\partial \nabla \phi}\right) = |\nabla \phi| \delta'(\phi) - \nabla\cdot\left(\delta(\phi)\cdot \frac{\nabla \phi}{|\nabla \phi|} \right)$
From the product rule of divergence, the second term is
$\nabla\cdot\left(\delta(\phi)\cdot \frac{\nabla \phi}{|\nabla \phi|} \right) = \nabla \delta(\phi) \cdot \frac{\nabla \phi}{|\nabla \phi|} + \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right)$
Since $\nabla\delta(\phi) = \delta'(\phi)\cdot \nabla\phi$, then this term becomes
$\nabla \delta(\phi) \cdot \frac{\nabla \phi}{|\nabla \phi|} + \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right) = \delta'(\phi) \cdot \frac{\nabla \phi \cdot \nabla \phi}{|\nabla \phi|} + \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right) = \delta'(\phi)\cdot|\nabla\phi| + \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right)$
Plugging this result into above equation 1 yields:
$\frac{\partial F}{\partial \phi} - \nabla\cdot\left(\frac{\partial F}{\partial \nabla \phi}\right) = |\nabla \phi| \delta'(\phi) - \delta'(\phi)\cdot|\nabla\phi| - \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right) = - \delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right)$
Hence, the Euler-Lagrange can be derived as:
$\delta(\phi)\cdot \nabla\cdot\left(\frac{\nabla \phi}{|\nabla \phi|} \right) = 0$