Mana restored is equal to the damage of the attack before factoring defense, but will never be lower than 10. Damage from drowning and debuffs does not trigger this effect, while damage from falling will. This effect does not stack with the mana restoration effect of the Celestial Cuffs.
When taking damage from an attack which deals less than 10 damage, the Magic Cuffs restore 10 mana. Taking damage from an attack which deals more than 10 damage restores that amount of mana (for example, a 25-damage hit restores 25 mana). Note that this is often not reflected in the damage numbers in-game, as these display the amount of damage taken after taking defense into consideration.
The Magic Cuffs are a very valuable accessory when regularly using any kind of magic weapon. The maximum mana bonus can even be doubled by reforging the accessory to an "Arcane" modifier.
Self-inducing damage proves to be a reliable source of mana restoration. With a reasonable amount of defense, the damage taken can be reduced to a negligible amount, while the mana restored equals the base damage. Damage can be self-induced by, for example, traps (including Spikes and Wooden Spikes), explosives, or Explosive Bullets.
The Spectre armor set bonus pairs well with this, as using a magic weapon costs mana and restores health, and when the player takes damage the mana is restored, causing the process to repeat as long as the player is not taking too much damage and dealing magic damage.
On the tModLoader version, an artificial Corruption can be created to fish for the Corrupt/Defiled Crates. This can be done with materials from another world, or Corrupt Seeds can be bought from the Dryad in a Graveyard in Hardmode.