"Filter" is a Tik-tok / snapchat / instagram parlance for any kind of overlay / transformation. It's grown larger than just sepia filters and similar. All the ones that do facial tracking and overlay a mustache or w/e is funny in the moment are also referred to as filters.

See https://www.snapchat.com/lens

There's a pretty clear expected transformation here though? It takes an image and then reduces the "shiny-ness" of it by giving it the same transformation: change the sky to overcast, add material degradation like rust, reduce the landscaping by adding weeds/puddles, and remove the happy looking people.

Right, filtering is the reduction of information while diffusion/generation is creation.