Magid is the Mitzvah of relating the story of the Exodus from Egypt and is the central portion of the Seder. The words “Bibhilou Yatzanu MiMitzrayim” (Aramaic for “in haste, we left Egypt”) are written in the Rambam’s Hagada (Hilchot Hametz Umatza, Nusah HaHagada), and many authentic Sephardic Hagadot incorporate this text. As a segue into the Magid section, there is a Moroccan custom to chant “Bibhilu” while the head of the family passes the Seder plate over the heads of those present. Rabbis Yosef Benaim (Noheg Behochma) and Baruch Toledano (Kitzur Shulhan Aruch, pg. 147) attest to this longstanding tradition in the Moroccan community. Furthermore, the student of the Rosh’s son, Rabbi Itzhak El Khadab (Hagada Pesah Ledorot) writes that even by the thirteenth century there was a custom in Spain to pass the Seder plate over the heads of the children who were present at the Seder. Rabbi Haim Palagi (Haim Lerosh) discusses this custom, and the HIDA attests to the presence of this custom in Tunisia.
There is great importance placed on rousing the curiosity of children at the Seder, so that they may pose questions and further enhance the telling of the Exodus from Egypt. The Shulhan Aruch (Orah Haim 472:16) gives the example of handing out treats to children so that they notice a difference from regular meals, and then ask questions. In a similar vein, Rabbi Ithzak Hazan (Hagada Ko Lehai) cites Rabbenu Simha, who says that by raising the Seder plate, there is a departure from the normal events that take place at a typical meal, thereby encouraging the children to inquire. Another reason, writes Rabbi Yosef Benaim (ibid.), is that the plate raised above the attendees’ heads is symbolic of the Anane Hakavod (lit. “Clouds of Glory”) which protected the Jewish people when they left Egypt. Rabbi Haim Palagi says that, on a Kabbalistic level, there are ten Sefirot (lit. “Divine Attributes”) which are alluded to in the ten items on the Seder plate, as described by the Arizal. When lifted, the blessings from these Sefirot emanate from the plate and rest upon those present at the Seder table.
Summary: Raising the Seder plate over the heads of those present at the Seder while chanting “Bibhilou” is a well established and ancient custom.