This is such an interesting subject!! It's really hard to define genres.
But I find it odd that the agent doesn't include any examples of magical realism, but several of fantasy. Here in Spain and Latin America, magical realism is an established 'genre'. One Hundred Years of Solitude by García Márquez is the most famous example, it's basically the book that kicked off the genre. There are older short stories that have elements of magical realism like The Curious Case of Benjamin Button, or Kafka's writing...but Latin America's magical realism is where it all really kicked off. House of the Spirits by Isabel Allende is my personal favourite. Then there's Murakami, and the agent saying that there can't be a portal is kind of funny, because he uses them in some of his books, and they're still considered magical realism, not fantasy. When I read fantasy or Magical Realism, I can't help feel they are completely different, the latter is a 'literary' genre, so the plot/themes aren't going to follow the structure you usually find in fantasy. There's no awe or wonder in the magical elements, they're just part of life (hence the realism). There are obviously going to be some novels that blend both (think Ghibli movies), and there's 'literary' Fantasy...but the whole 'literary' label is a nightmare. I guess it just depends on the country. It's a genre that's only now gaining popularity in English, but in Spanish-speaking cultures, has been present since the 60s .