Hmmm….I just tried using it, and couldn’t get it to NOT work.
Forgive me for possibly stating the bleedin’ obvious, but:
I assume that your “take matte from layer” layer does actually have an alpha channel?
Have you switched off the layer with the matte, so you can see the “good” layer which might be hidden behind it?
The effect works differently from the usual track matte, in that it makes the matte move WITH the layer.
Have you randomly tried switching on/off the Invert Matte, Stretch Matte options?
– Paul