A user on the MacRumors forum has built an app to do exactly this task, find and delete all photos in a folder or in the camera roll that have not been marked as a favorite.
The app is "Deleter" by saleksandras and it's at: https://itunes.apple.com/us/app/deleter/id1180101544?ls=1&mt=8
I just ran the app, and it worked perfectly! It selected the 2,600 photos on my phone that I hadn't marked as favorites and ignored the 600 that I had favorited. When I hit delete, it moved all of the non-favorites from my camera roll to the recently deleted folder (so I could recover them for 30 days if I needed to). It took a minute or so to delete everything, but it was 9gb of photos, so I think it can be excused for that :)
It was a bit nerve-wracking to hit delete on that many photos, but I had already backed up my camera roll to my PC using the PhotoSync app (another great tool), so I wasn't really worried.
I don't know why Apple doesn't include a mass-selection tool to easily select all favorite or non-favorite photos, but this app does the job!