You seem to be confused by notationnal issues. With some luck I can deconfuse you, with less luck your confusion may increase ;-)
Usually - in classical differential geometry - one would write something like $\mu^j_l dx^l\otimes \frac{\partial}{\partial x^j}$ to define locally a $(1,1)$ tensor or tensor field. The $\mu_l^j$ are just the coefficients, the $dx^l$ form a base of the cotangent space and the $\frac{\partial}{\partial x^j} $ a base of the tangent space. The tensor products $dx^k \otimes \frac{\partial}{\partial x^j}$ form a base of the space of $(1,1)$ tensors. The $\theta^j$ from your example are just coefficients of a vector field, the base vectors are omitted for some reason.
If $v= v^j \frac{\partial}{\partial x^j}$ is, in this formalism, a vector field and $\omega = \omega_k dx^k$ a one-form, then you may look at the $(1,1)$ tensor field $v\otimes \omega$ with coefficients $ v^j\omega_k$. Written out more explicitly, the $(1,1)$ tensor field is
$v\otimes \omega= \omega_k v^j dx^k \otimes \frac{\partial}{\partial x^j}$
This is just writing down a tensor field in a local base representation. Applying a contraction to that tensor field means kind of inserting the vector field $v^j\frac{\partial}{\partial x^j}$ into the one form $\omega_kdx^k$ resulting in the sum $v^j\omega_j$, since $dx^j(\frac{\partial}{\partial x^k})=\delta^j_k$ is just a scalar. In a coordinate free notation you'd write $ C(v\otimes \omega) = \omega(v)$ ($C$ denoting contraction) that is, you apply the linear functional to the vector.
A general $(1,1)$ tensor is, locally, written as $\mu^j_k\frac{\partial}{\partial x^j}\otimes dx^k$ 'Applying' this to a one form $\sigma_k dx^k$ results in a one form $\mu^j_k \sigma_j\frac{\partial}{\partial x^j}\otimes dx^k \otimes dx^j = \mu^j_k\sigma_j dx^k$