I have tried using this spell twice now IG and it only seems to apply the effects of either protection from good or evil. The first time is was an item called enchanted ankh that didn't give the deserised effect and the second time from a scroll.
It would be nice to know if anyone else is experiencing this problem and if there is a fix.
As i recall, it only works if you have a spells.2da from the thread here (//%22http://www.escapefromunderdark.com/forums/showthread.php?t=37419&highlight=Magic+Circle%22) Lines 103 and 106 I think should be copied over, don't replace it totally or I don't think the new spells will work. I suggested udating the spells.2da to include it.