Thank you for writing.
I have tested the described behavior, but on my end the filter works correctly. Please refer to the attached video (opens in browser and requires Shockwave flash player to play).
Please note, that such a behavior is possible if you are changing the item labels for example in the formatting event, since the filtering mechanism works with the data items.
If you provide me with a reproducible scenario, I will be glad to help you with it.
the Telerik team