There is a workaround to realize filtering function, specifically on the modification to correct the XPath expression.
1. On the inserted linked source data view, click on the [>] to bring up the Common Data View Tasks pane. Click Filter.
2. On the Filter Criteria dialog, configure the filter. Example: Employee LName Begins With 'A'.
Note: the filter should get successfully applied (albeit, incorrectly) and nothing should show in the data view.
3. Go to code view, and search for 'A' (or whatever filter criteria you used). Change the following XPath on the following code (just an example, change your code according to this) snippet from:
Note: the change occurs within the normalize-space function. The ../../../Rows/Row/ is erroneous as we are already at that level in the XML structure.
After make the change, the data view should now filter as expected.
Hope it helps! If I misunderstood your concern, feel free to correct me.