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Non-filtering enabled means any given client can make changes and the server will replicate them. This is faster but opens doors for hackers and exploiters. Filtering enabled means the client provides user input, and the server decided what to do accordingly. This idea came from Roblox, but I wonder if Minecraft servers are filtering enabled?
In other words: Is Minecraft Filtering Enabled?
This isn't even a thing Roblox came up with. It's a thing known in the industry as "the client is a lying, cheating, bastard" (or its technical name, "authoratative server").
Minecraft utilizes it, even in single player (using an integrated server, which runs on a separate thread, see: sides). LAN is just the single player integrated server opened up to additional connections.
It should also be noted that in creative mode the client becomes authoratative over several aspects normally controlled by the server, eg. inventory contents, but this is usually regarded as fine because it's creative mode.
