I believe this is a result of their "brilliant" strategy here.
http://www.playonline.com/updateus/041209we8yu0.html
Scroll to the very bottom. They assigned "priority" to certain filters. Problem is, the way it's set up, it doesn't work. PCs are Others, and monsters are NPCs. With the current priority settings, if a PC initiates an action on a NPC, it will show up in the log window.
I however, never did try turning on *all* the filters, but I have all the NPC and all the Other filters on and I still see other people's attacks on monsters outside of my party. I used to keep "Effects on NPCs" or whatever it's called turned off because I thought it would prevent the log window from saying if my debuffs stuck or not, but even with it on, it still says it.
It's very confusing. I never had a problem with the other filter set up, but I guess enough people did that they decided they had to change it.
....then again, did any of you have a problem with the old Food system? Huh. Methinks SE kinda went overboard with that last update.