To enable Last sender Notification, you need to have SMS Magic Interact version 1.41 and above.
Please delete the existing Lookup configuration from “SMS Settings tab-->Configure action on incoming SMS--> Look-up configuration”.
Then setup similar new look-up configuration and just mark "Incoming SMS Owner" field as- Last Sender" while doing the same (Refer below screenshot for more detail).
Also check Notify owner field to enable email sending to last sender and save the setting.
Once you are done with this setting- this will send email alert on new incoming SMS to the salesforce user who has sent out the last text message.
When an outgoing sms is sent, that SMS will be logged under SMS History object. For finding out last sender on receiving new incoming response, our application check SMS History data for last 7 days.
You need to ensure that your Mobile numbers are in international format e.g.61447875724.