Apply video effects to selected image portions
While previously video effects could only be applied to the entire image area, MAGIX Movie Edit Pro 17 Plus allows you to select any image area and selectively apply effects only to it.
Sorry I don't have MEP17+ to directly answer your question, but I've been doing selective area effects since MEP 14 or earlier.
The set up is a set of three tracks (ignoring audio): original clip, clip with effects applied, and an 'alpha mask' in between. The mask determines whether you see the track above it or the track below. So if you want a circular area to be say pixilated you have a black and white image of the required circle and apply 'alpha' chroma key effect to it.