As suggested by @browj2 this is a spin-off from https://www.magix.info/us/forum/video-pro-x-and-vegas-pro-exports--1324934/.
Masking is a useful editing tool yet among my terrestrial video friends few use it. But anyway masking is usually used to work on part of an image without affecting the rest. You might want to darken, or lighten, the foreground or distant view in a scenic shot that has difficult lighting. Or slightly sharpen the centre of a flower closeup. Or blur a face or vehicle registration plate. Decent consumer video editors usually provide a means of masking. I've forgotten what MEP/MS provides. My Vegas MS Platinum 17 has in addition to template shapes Bezier Masking where you can draw freehand around an area. Other video editors have Mask brush painting.
But what if you have a situation that requires a fiddly complicated mask. This is where being able to create your own mask and use it on a track that provides a Mask Blend/Compositing mode is useful.
Here is a situation I encountered a few years ago when shooting PAL tape SD. Unfortunately the original camera image below doesn't show the problem. The Katydid is on the outside of a glass window which is showing many dirty or dust spots which annoyed me so I wanted to remove them.
Original camera image
The Mask image shows you where the spots are and their size.
Mask image
The mask actually has the spots white with a transparent background but I've made the background blue in the image so they are visible for this post. I made my mask by taking an image from the timeline and saving as a file which I then opened in an image editor. I created a layer above the image and drew a circle around the annoying spots and feathered them. I then filled the circles white, muted the original image underneath and exported as a 32 bit png file. You need a 32 bit png file to get an alpha layer with transparency for the background.
Then in my video editor (which at the time was Serif Movie Plus) I had the original image on a track and above had two tracks grouped together. Grouping (called Parent-Child in Vegas) limits the effect of the mask track to the other track or tracks in the group. A copy of the original clip was placed on one of the grouped tracks and my png mask on the other and that track was given Blend mode "Mask". So I now had the masked spots acting like miniature cookie cutters cutting out those parts of the image on the grouped clip copy. Next I moved this copy clip within the image so good parts of the background were now in the mask spots. Hey presto the background was now clean!
Final Image
I ran into a problem when the Katydid moved which involved reposition the position of the copy clip. I didn't animate. I simply split the video clip and repositioned it frame by frame. The video shot is one of several that I tidied up.
The original shot was of course taken on a tripod. Hand-holding closeup doesn't work due to shallow depth of field plus the slightest movement and your subject is out of frame. Insect closeup videography is a challenge. I have only seen a Katydid twice so the shots I got were a lifetime opportunity. She appears at 9 minutes 9 seconds in this 11 minute video https://vimeo.com/50350163.
To finish, my question was how could masking like this be achieved with MEP/MS/VPX which don't appear to have track compositing modes? No doubt there are probably other ways but the tricky points are you need to create many masking areas and you need to move the image for the mask without moving the position of the main image.