Can't set layer to alpha or luma matte

Adjustment layers are used to add effects to multiple layers. They do not contain any pixels. There are no RGBA values that can be used as a track matte. You can create a mask on an adjustment layer to limit the range of the effects, and you can use a track matte on an adjustment layer to do the same, but you have never been able to use an Adjustment Layer as a track matte.  If you want the Adjustment layer to apply Magnify and Exposure to the Background layer you can use the Text layer as an Alpha Track Matte for the adjustment layer, but you have two text layers so you'll need to also add Set Matte to the Adjustment layer above the Magnify and Exposure effect. 

Another approach would be to create masks or shapes from the text layer, then use those masks as the source for masks on the Background layer and then set the masks as limiters on the effects applied to the background area. You just have to add the masks to the bottom of the effects controls in the timeline by adding a compositing option. 

I would probably pre-compose the text layers, use them as a track matte on a duplicate of the Background layer, then apply the effects to the duplicate layer and experiment with things like Layer Styles or the Matte Tools to generate the kind of edge I wanted on the text affected layer.