I like the idea of having E increasing magic armor but reducing physical armor because it lessens the problem of having high damage reduction on both damage types, physical and magic. Let me give a simple suggestion out of the idea:
Master of the Mantra [ E ] (Completely new)
Toggle - 5/3.5/2/0.5 seconds cooldown both toggle on and off.
Toggle on to half Magebane's armor and convert them into magic armor. When toggle on, also adds additional 4/6/8/10 magic armor.
Mana combustion as an offensive ability needs some buff and the proposed armor reduction when toggling on 3rd ability reduces his survivability against enemy, especially spellcaster with high attack damage as Magebane is intended to counter. So, the active is proposed to grant Magebane a bit survivability when toggling on his 3rd ability against spellcaster.
Mana Combustion [ Q ]
(The passive remains same) Activate to heal Magebane by 5/6/7/8% of attacked target's max mana when auto-attacking. Has 3/4/5/6 seconds duration and 12 seconds cooldown.
Flash also gets adjusted to reduce Magebane's flash-farm problem the original topic fleshed out and increase his intended proficiency against spellcaster by giving Flash same general parameters as Wretched Hag's Flash of Darkness and adding new effect to differentiate between those Flashes as below:
Flash [ W ]
(General parameters like cooldown, mana cost, and range are same as Wretched Hag's Flash of the Darkness) Gives a debuff for 6 seconds (doesn't stack, only refreshes) to enemy units in 225 radius to Magebane's flash destination, giving the debuffed enemy unit a stacking individually timed debuff for 3/4/5/6 seconds to increase Magebane's attack speed when attacking them by 20% of initial mana they spend (I'm not sure whether mana upkeep should count or not).
Adjustments above aren't enough to change Magebane's game stage from late-game to early-mid game as the original topic explained, so stats adjustment are needed such as adding starting strength and starting armor for early-mid game benefit and reducing agility growth and normalizing BAT to 1.7 for reducing late-game potential.
In the end, this suggestion is intended to retain Magebane's identity as auto-attacker while also try buffing his intended specialty against spellcaster. That's all for now, thank you for the idea Physiker.