The Magic Recovery Code is something from the early days of Stacks, when it was still called Blockstack. It is an encrypted Secret Key that was send via email and looks like a random string of characters. Leather supports decrypting this with the password you set back in those days.
It is possible to get the message below when entering a seed phrase without spaces. Add the spaces between the seed words and you should get the expected flow again.
"You entered a Magic Recovery Code.
Enter the password you set
when you first created your Blockstack ID."