Magic Leap's hi-tech augmented reality glasses revealed I am pretty pumped about this technology. Mixed reality is going to change our lives so much! Engadget have a great review. https://www.engadget.com/2017/12/20/this-is-magic-leap-s-mixed-reality-headset/
try duplicating and merging your AO and diffuse layers, for what i can see the magic tool is selecting everything because of the source texture. the AO will add constraints to the magic tool. Also try desaturate the duplicated layer, and play around with the magic tools values.