The transmuting system has drastically changed. Read
here to learn more.
But basically just start with a single tier 1 magical item and put that in alone. Extract the essence by clicking a whole lot and then if you win you'll gain proficiency and get the essence. Put the essence in with another magical+ item of the same tier and do it again to reroll the item and also gain more proficiency.
You probably won't like it at first if you're used to the old muting.