Someone has already asked this question about a month ago, and he did a fine job of explaining it and it is EXACTLY what is happening to me. Here is the link to the original post.
I am posting this here now (I'm sorry if you consider it a "duplicate") because I want to add more info to his problem and it's not allowing me to comment on his post since I'm a brand new member.
My new info - I have tried everything - deleting, moving, uninstalling... NOTHING has worked. The last step I tried was to completely remove EVERY single piece of Apple software, AppData, user files, etc. from my machine. No dice. I'm using the latest Windows 10 with iTunes 126.96.36.199.
I also had my Apple pro buddy try and help me since he has worked at the Apple Store in Tokyo forever, and he couldn't figure it out. But that may likely just be because he's been a Mac guy his whole life and has no Windows experience.
And now my smart playlists that WERE working using the playlist filter are gone forever... Thanks, Apple...
If anyone can help I will be extremely grateful.