The bottom clip should have the B&W effect and no CC. The top clip gets the CC but no B&W.
And you don't need all those keys unless you want a LOT of action. Just two keyframes, the left one with a small size, the right one with a large size.
I'm not sure the cookie cutter behaves well with a size of zero. (Don't have my other PC powered up or I'd try it out.) Which is why the fade is there: set the left CC size to very small, then fade it in for a smooth start.
Don't forget to experiment with the feather and border sliders.






