Yes, I have prime and have used the Magnus last month for 40% upto 1000 on bills over 2500.
So in this case, as you mentioned above. It's capped to 35% upto 1000 INR as 10% discount will be applied by the restaurant and card will be upto 25% only after the discount.
Isn't it better to not book and directly use 40% upto 1000 in such cases?