We extend a nuclear ab initio framework based on chiral two- and three-nucleon interactions to investigate shape coexistence and the degradation of the 𝑁 = 20 magic number in both even-even and odd-even magnesium isotopes. The quantum-number projected generator coordinate method, combined with the in-medium similarity renormalization group (IMSRG), is employed to compute their low-lying states. This approach reasonably reproduces the coexistence of weakly and strongly deformed states at comparable energies, and allows us to track the emergence of the 𝑁 = 20 island of inversion through the continuous IMSRG evolution of the chiral Hamiltonian. Our results indicate that the ground state of 33Mg with spin-parity 3/2− is predominantly a strongly deformed configuration with 𝐾𝜋 = 3∕2−, while the lowest 7∕2− state is predicted to be a shape isomer, consisting of a mixture of weakly deformed configurations with different 𝐾 values. The results highlight the essential roles of both dynamical and static collective correlations in reproducing the ordering of nuclear states with distinct shapes.