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Luminar Neo version 1.1 has introduced the portrait background removal tool, which can produce excellent results but may sometimes require manual input. Skylum has provided a tool to assist the AI for better outcomes. The video tutorial demonstrates various approaches for working with portraits and backgrounds, along with some secret hacks to maximize the tool's potential. Using the tool is simple, requiring users to access the layer properties and make adjustments as needed. This tutorial aims to simplify the process and help users make the most of the new feature.