HoMM3 HD is a mod (add-on) for the game Heroes of Might and Magic 3.

Filters are used when the resolution you have selected is not equal to the actual resolution of your screen. "Stretchable" means that the image is stretched. It's similar to how it works in a graphics editor. Blurring is just a side effect of resizing the image using a specific algorithm. You can clearly see the result of applying filters in the game's screenshots.