Try changing the blend mode to Alpha Add.
thanks for answering Rick.
nope. it did not do the job. here is a project recreating the problem:Master Comp Contents
Precomp - background sliced with masks with a Color Correction Adjustment Layer
Color Correction Adjustment Layer
Background layer - (same as inside the precomp)
notice the fringe around the edges
I noticed that only when the Adjustment layer is in a blend mode, this situation occurs.
I looked at your sample comp. I hate to tell you this but what you are seeing is normal and expected when you anti alias an edge by drawing a curve and then apply a blend mode to an adjustment layer. You have a very odd workflow going here and you have very extreme adjustments that leave very little room for calculations.
If you just look at the edge of one of the layers in your pre-comp with the adjustment layer turned off and the magnification factor set to max you can see the aliasing and the difference in the color values of the individual pixels:
Blend modes work on color values so when you add the adjustment layer with the Luminosity blend mode you get this:
This is normal and expected and also happens if you are in Photoshop or any other compositing app where you try and use this workflow. The problem is even more obvious when you try a blend mode like difference:
There are many work arounds but the easiest thing to do to have the luminosity blend mode work is to copy the curves effect to the masked layer, turn off the adjustment layer, set the mask layer's blend mode to luminosity and then collapse transformations in the main comp.
With your original example, the girl, I would either work without blend modes draw the masks on the adjustment layer instead instead of pre-composing. You just have a very odd workflow going here and you are failing to consider that blend modes work on pixel values and anti aliased edges change the pixel values.
I hope this helps. Your problem isn't a bug, it's a workflow issue.
thank you Rick. eventually as I mentioned I changed my workflow and it did solve it. I guess I tried to hold the rope at both ends and at some point the pixels said enough. your example illustrates why. note that these extreme adjustment were only for illustrating purposes. you can do very mild adjustments and even then this will happen but as you explained - it's because the anti-aliasing caused by the adjustment in the precomp - so the solution should be make it happen in the same comp.
this is me trying to explain in a very simple way.
thank you for the technical breakdown. you put time and effort in your posts and I appreciate it.