Quote Originally Posted by ThomasJ
But giving it a closer look, the softness does something whacky with the highlights. They just lose all detail and look weird. It makes the bright part of an image look out-of-proportion brighter..

That's intentional. Not all filters do that, but some people really like it. There are many effects possible in a filter. One is to soften or "diffuse" small details. Another possibility is to lower global contrast (increase glare). Still another is to flare around the brightest parts, causing what is to you "whacky highlights". Some filters combine the effects, others just do one thing.