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Basically its mean that 50% + 50% magic resistance will not give you 100%.
It will give you 50%
+ 50% of the your new magic resistance (50of50 = 25)
In total you get like 75% resistance instead of 100.
Overall it means that every next individual source of resistance will be less efficient in absolute value.
There is more univeral formula to count it in the provided link and more info on the topic.
Multiply all the heroe's magic damage reducing modifiers with another to get the value that remains as damage taken. 1 - damage taken = your resistance.
Example:
Hero base resisance: 25%
1) +30 with Pipe of Insight
2) +15 (+45 while active) with Glimmer Cape
Glimmer Cape not active:
1 - ( (1-0.25) * (1-0.3) * (1-0.15) ) =
1 - ( 0.75 * 0.7 * 0.85 ) =
1 - ( 0.44625 {which means 44.625% damage taken of the original 100% received} ) =
0,55375 = 55.375% magic resistance
Glimmer Cape active, adding another +45%:
1 - ( (1-0.25) * (1-0.3) * (1-0.15) * (1-0.45) ) =
1 - ( 0.75 * 0.7 * 0.85 * 0.55 ) =
1 - ( 0.2454375 ) =
0.7545625 = 75.45625% magic resistance
You can equip the same item twice and benefit from it's magic resistance. The formula means reaching 100% isn't possible.