I’m testing this by throwing items on the ground, but it happens during gameplay when monsters are dying and dropping items.
Item drop test
https://www.youtube.com/watch?v=AJrzT4XX5a8
During game play, the hidden dream catcher drops at the 9-10 second mark
https://www.youtube.com/watch?v=-fVDSxxY5Zg
Example scenario
- player’s Ballista kills an enemy that drops an item shown by the filter
- player hovers item, pop up shows up
- player’s Ballista kills another enemy that drops an item not shown by the filter
- currently hovered item box closes/hides