I think the issue here is the 'black' of your image is a ton lighter than the real black of the mask. And you don't have a feathering applied to blend from the image to the mask area ... just the hard line. Increase the Mask Feather number either in the box of blue that now says 10 (pixels) to something quite larger, or use the mask controls in the Program monitor itself.
And the grade from an image you're masking isn't applied to the mask, ever. Unless say you've another clip on a higher layer and use a mask to reveal that layer ... then whatever grade you've got on that upper clip of course shows.
Neil