When filtering variants, the structure used by the List of Values determines how the substitution rules are applied.
The checking process
Display the filter, select the value for the criteria, and then apply the filtering.
Using a flat structure:
If no object is found to match the criteria value, then because there are no other levels to check, the primary object is used.
Using a hierarchical structure:
If no object is found to match the criteria value, then the next level is checked for a possible match. When all levels have been checked, and if no match has been found, then the primary object is used.