It negates magic equal to mana spent. While I really don't want to use numbers for this, but for clarity's sake I will. For example, a spell which needed 10 mana to cast would be halved in effectiveness by luminosity spell which used 5 mana. If luminosity used an equivalent of 9 mana, it would be almost completely vaporized. If 10 mana is used, both are nullified completely. If luminosity spell used 15 mana, it will destroy the spell and continue on with 5 mana worth of effectiveness. While we won't use numbers, that's the easiest explanation I can give.

As for the second part, it would do nothing if the rocks are already propelled (not completely true, but focusing Luminosity into such density as to have enough heat to melt the rocks is what very few can do). If the rocks are in the process of being propelled, it would remove the mages control over the rocks - the spell part is moving the rocks, not rocks themselves. However, if a mage creates rocks via magic, they will be affected.