I wouldn't call it filters as much as I would say that the algorithm identifies that the links are not of value for the site. Just like any other links, really.
For instance, the nSEO people seem to like throwing porn links at sites. At first, the site will start ranking for those terms but since people who use those terms are looking for porn and not "Mary Joe's Etsy Shop" they will bounce from her Etsy shop and find another link for what they are looking for. The algorithms calculate that no one really wants Mary Joe's Etsy shop in their porn searches, so the site drops out of those searches.
What happens is the increase in traffic, though, is then returned to normal traffic stats before the nSEO. The nSEO person and the site owner see this as a "penalty," but really, they were benefiting (albeit only for traffic but not for conversions) from the nSEO links and then they went back down to natural traffic levels. It's this perception that makes people think nSEO works.