This spell is too strong
Rules as written you do not know what spell the opponent is casting when they are casting it. Based on an optional rule in Xanathar's Guide to Everything, you can use your reaction to make an Intelligence (Arcana) check to find out, but then you cannot use it for Control Magic anymore, leaving you with the choice to try and learn what is cast, or counterspelling/controlling it blindly.
As you do not know what spell is cast, you also do not know what legal targets you can pick, and have to pick blindly. If you pick an illegal one, then the spell is just wasted, which may be fine, as it works as a counterspell of sorts. If you pick a legal one, the spell can become extremely powerful, not only negating the opponents action, but giving you a free one, and possibly a free higher level spell slot on top.
The problem is that even in this setup where you do not know what they are casting, the spell is better than counterspell in many ways.
A typical combat encounter is just 3 rounds, or maybe 4-5. That means that most opponent spell casters lead with their high-level, high impact spells to maximize their effect and ability to impede the party: they do not know if the party has this spell, or counterspell, and trying to trick the party into wasting counterspells by betting on that and leading with low-impact cantrips is an ineffective and unlikely strategy when the party fighters and sharpshooters are busy slicing you up. So we can expect to capture high level spells with this, by the time we can cast it.
If you always pick a spot near the opponent as the target, the effect will be that if the spell is a beneficial or harmful one targeting a creature, it will be lost, just as with counterspell. If it is an area effect with a target location, there is a chance that it is some beneficial effect the opponent cast on their area which would waste the Control Magic, but the majority of such spells in combat are harmful area effects that target the party.
I think because of this, the spell is not well balanced. The baseline to compare against is counterspell, which is a real contender for the best spell in the game. I think any spell that is potentially stronger than counterspell should be looked at very critically. This essentially is counterspell for spells up to level 5, just as if you upcast counterspell to level five. For higher level spells, it either is counterspell, or, more likely than not, counterspell that gives you a free level 6+ spell to harm the opponent with on top. I do not think the off chance of the spell being a beneficial area effect and still working is making up for it.