Filtering is applied, if you clear the filter descriptors and enable/disable custom filtering. Steps to reproduce:

1. Click on the filter button on the Name header.  Check only one name, and only one record should be visible in the grid.
2.  Click the Clear button.  All records should now be visible.
3.  Click the Toggle Filter button once, to enable custom filtering.  
4.  Click the Toggle Filter button again to disable custom filtering.

Workaround:

private static readonly FieldInfo FilterContextFieldInfo = typeof(RadCollectionView<GridViewRowInfo>).GetField("filterContext", BindingFlags.NonPublic | BindingFlags.Instance);

this.radGridView1.FilterDescriptors.Clear();
            StringCollection filterContext = FilterContextFieldInfo.GetValue(this.radGridView1.MasterTemplate.DataView) as StringCollection;
            filterContext.Clear();