Iteration Status and Team Board show an error when using the Work Items Type in a custom filter.
The error shown is:
The filter condition referenced by n does not exist or is not valid. Custom filters will not accept Work Item Type conditions, but you may use type specific fields, e.g. State(Defect)
The reason this occurs is because the Work Item Type filter is not included as part of the query parameter that is sent to the application but instead included as a separate "top level" parameter. Because of this, it is not possible to extract the Work Item Type from the filters, understand the user's intention when using custom filter logic, while maintaining or recreating the intended parenthetical grouping.
As a workaround please use work item type-specific fields which will constrain the results to a specific work item type.
For example, specifying a filter with "State (Defect)" and all possible states in the value, will constrain the results to only defects: