Fixing this problem requires understanding two things:
1) If a label has been placed on an existing email by a filter, the label stays even if that filter were deleted. One must delete the label itself, and then re-create a new filter in order to get your edits to “take”.
2) There is a bug in the Gmail filter system. If you try to set up complex Boolean such as
from:user1@me.com -to:user2@me.com -junk_term
It will work fine on the initial search, but if you use it to create a filter, the terms, especially the NOTs, will be garbled.
The correct syntax, (hat tip to chenghuayang) is to ignore the to’s and from’s.
user1@me.com -user2@me.com -junk_term