I think there is some confusion here. I agree with John that the layers within the layers panel seem very odd. You would need to post your PSD file so we can take a look at it.
This is a simple process of using a smart object to facilitate the addition or changing of the photo image within a specific background.
All you need are two layers. No need for layer masks at all!
One rectangle in the color of choice as your background. Color can easily be changed.
One ellipse in white, converted to a smart object to serve as a placeholder/template.
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When you double click the smart object (placeholder/template) layers thumbnail, it will open a new PSB file.
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It will look like this....
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Now add a photo via embed, resize and position and clip to the white ellipse layer.
It will now look like this....
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(This is the layers panel for the PSB file)
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Save (and close) the PSB file and it will update the placeholder/template layer in the original file......
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You can also add a layer style to the placeholder/template layer to add effects, in this case a stroke.
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Anytime you want to change the photo, just double click the placeholder/template/smart object layers thumbnail and change.
