PokéBase - Pokémon Q&A
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Yes, it does.

Damage caused by entry hazards (such as Spikes) and recoil and crash damage (except from Struggle) is prevented. Magic Guard will also prevent Life Orb's HP deduction without negating its power boost. Damage from confusion still occurs.
-Quoted from Bulpapedia


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That sounds kinda broken considering some of the pokemon that have magic guard.