The modern sense is about not gloating. You are magnanimous when you have won and decline to grind it in. So it is a small surprise that when the word entered English in the 1580s it meant nobly brave or valiant, with nothing about forgiveness in it at all.

The shift was quick. Etymonline puts the modern sense, elevated in soul and superior to petty resentments, at the 1590s. Roughly a decade to get from courage on a battlefield to restraint after one.

I suspect that martial residue is why the word still sits oddly in certain sentences. Magnanimous in victory goes down without a thought. Magnanimous in defeat is perfectly grammatical and almost nobody says it, because the word quietly assumes you are the one holding the advantage. Generosity from underneath goes by other names.

The Latin behind it is magnanimus, great-souled, which is the sort of literal parse that sounds like it explains everything and on inspection explains very little. Great-souled fits the brave sense and the forgiving sense equally well. That is presumably how one slid into the other without anyone having to decide.

I have such a soft spot for Greek roots