This filter was added in Caldera Forms 1.4.6
By default, when using the Caldera Forms {summary} magic tag, single select option fields will show the value, not the label of the selected option. This filter allows you to show the label instead of value in the email notification or other places the summary magic tag is used.
You can set the label to be used for a specific field only:
Or you can set the label to be used for all single-option select fields in a specific form:
Or you can set the label to be used for all single-option select fields in all forms:
Where Does This Code Go?
When using WordPress hooks to customize Caldera Forms or other plugins you should not modify the plugin files, or you will lose your changes when you update the plugin. Instead you should create a small plugin to hold the custom code. It's easy, learn how here.
Technically you can add the custom code to your theme's functions.php, but then you will not be able to change your theme and keep these customizations.