I was able to replicate what you’re experiencing. It looks like the override event isn’t firing at all.
I’m testing this by clicking the search button to open the search slide out. I would assume if my override event was firing it would choose to fire when I click the search button too. When looking in the console with debug on, I only see it firing the base event. This would explain why the validateFilter error is still showing.
I also tried to overcome this issue with the before event hook. While this did fire my custom event, I was unable to stop it from firing the original event with event-cancel.
So far it looks like this functionality may not be able to be implemented on BAQ Report forms.