The Magic Circle was created (actually from the metal band of a beer keg!) to support and engage the powerhouse and provides a great visual of the depth and dimension of the core powerhouse.
Students are taught to "lift the powerhouse IN AND UP" which is sort of one dimensional. However, if one holds the magic circle vertically, horizontally and in the medial plane - and squeezes it - you will better appreciate the dimension and full depth of the abdominal strength.
So, in answer to the question, "when is the magic circle used," it's frequently used as an assistant to completing an exercise, and as an increased challenge or additional resistance to an exercise. The powerhouse only becomes more powerful when it is worked in opposition to its stability. The Magic Circle helps us realize that oppositional force.
