Houston's Jalen Green scored 25 points and Alperen Sengun added 21 points and 15 rebounds for the Rockets, who withstood another monster game from Denver's two-time NBA Most Valuable Player Nikola Jokic to win 105-86.
Jokic scored a season-high 38 points to go with 19 rebounds and eight assists for Denver. But the reeling Nuggets, still feeling the absence of injured Jamal Murray, shot just 34 perfect from the floor and slumped to their fifth defeat in seven games.
Aaron Gordon embodied their offensive woes, going 0-for-12 from the field and putting up just two points. They finished group play at 2-2, but the point differential math meant an end to their chances of advancing.
The Nuggets were eliminated in a group that saw the New Orleans Pelicans solidify their hold on the top spot with a 116-106 victory over the Los Angeles Clippers.
Nuggets coach Michael Malone was more concerned with getting his team back on track after a 1-4 road trip.
"We need to get a win," Malone said. "We got off to a 9-2 start, everything was great, now... we can't win a game on the road. We're kind of getting away from who we are at our core in terms of defense and toughness."
The Magic, who beat the Nuggets two days ago, bullied the league-leading Celtics in the second half on the way to a 113-96 victory that pushed Orlando's winning streak to six games.
Moritz Wagner scored 27 points off the bench to lead the Magic and Paolo Banchero added 23 with seven rebounds.
Jayson Tatum led the Celtics with 26 points and Jaylen Brown chipped in 18 - 12 of them in the first quarter.
Brown connected on just two of 17 shots in the last three quarters as the Magic clamped down defensively to hand the Celtics their biggest defeat of the season.
"That's what we take pride in," Banchero said of the Magic's defensive effort. "That's our calling card.
"We just come into every game focused on what we've got to do to stop the team in front of us (and) we did a good job tonight."
The Celtics led by 12 early in the third quarter when Orlando unleashed a 17-0 scoring run. Orlando opened the fourth on a 10-0 run - capped by Moritz Wagner's running layup - and rolled from there.
The result saw the Magic conclude group play in the new tournament at 3-1.
The Celtics, who could have secured their berth in the knockout stage, fell to 2-1, level with the Brooklyn Nets and each with a game remaining when group play concludes on Tuesday.
The six group winners and two wild card teams advance to the quarter-finals of the tournament that concludes with semi-finals and the final in Las Vegas in December.
Banchero said the new Cup-style competition, designed to lend interest to early-season games, has been "huge."
"I'm glad we got the win," he said. "Hopefully we'll be in good position to move on."
The Minnesota Timberwolves also let a chance to reach the quarters with a victory escape, falling 124-111 to the Sacramento Kings.
De'Aaron Fox scored 36 points and handed out 12 assists for the Kings, who improved to 3-0 in group play.
They lead the Timberwolves, with Golden State still alive after a 118-112 victory over the San Antonio Spurs.
Stephen Curry poured in seven three-pointers on the way to 35 points for the Warriors, who handed star rookie Victor Wembanyama and the Spurs an 11th straight defeat.
Devin Vassell led the Spurs with 24 points off the bench. Wembanyama and Keldon Johnson scored 22 points apiece.
Knicks stun Heat
In New York, the Knicks roared back from a 21-point third-quarter deficit to stun the Miami Heat 100-98 in a must-win tournament game.
Jalen Brunson scored 24 points and Immanuel Quickley scored 20 off the bench for the Knicks, who out-scored the Heat 29-11 in the fourth quarter.
Jimmy Butler scored 23 points for Miami but missed a potential game-winning three-pointer with two-tenths of a second left.
The Heat will now be fighting for a wild card spot on Tuesday when they take on the Milwaukee Bucks, who were fueled by a career-high 39 points from Brook Lopez in a 131-128 victory over the Washington Wizards.
Giannis Antetokounmpo and Damian Lillard scored 31 points apiece for Milwaukee, who at 3-0 are closing in on a quarter-final berth.
It marked the first time in franchise history that three Bucks players scored 30 points in the same game.
The Phoenix Suns kept alive their bid to advance as a wild card in the West with a 110-89 victory over the Grizzlies in Memphis.
"Hopefully that's enough," said Devin Booker, who scored 40 points to help the Suns overcome the absence of superstar Kevin Durant, who missed his first game of the season with a sore right foot.