If you have a related BO as an attribute and use an inline form as the presentation method it is not possible to filter fields on that sub form based on those attributes.
For example:
MasterBO has peer relationship to SubBO
If SubBO has
SubBO.psCompany
SubBO.psEmployee
Where psCompany is a reference to another object of Company records and
psEmployee is a reference to People records where an Employee is then related to a Company
On the SubBO you are unable to filter SubBO.psEmployee to only show Employees of the Company you have selected.
Vlad has confirmed that this is a limitation to using a sub form.