how to Clip reference inside element

That kind of "clip" is called a "mask" in MicroStation, and it is a different tool in the reference toolbox.

Clip is to set the outer boundary of a reference and Mask is to hid parts of the interior.
Clip will work with an element shape, while Mask only works with a fence (but you can create a fence from an element so it's not that much work once you have your shape).