To elaborate, the filter also may not improve the accuracy, just the perceived accuracy.
To be correct but one second late is to be completely inaccurate. The system is trying to estimate the current position of the car, but also predict future positions.
So a little bit of imprecision is fine since it improves accuracy related to predicting the future positions of the cars. A slight move in one direction may indicate a lane change, so it is always useful to be aware of that so as not to accelerate past a car whose measurement appears to be more inaccurate, since they actually might be moving. If you did the same thing with a human's "sixth sense" perception of the positions of the cars, you'd definitely find that they move a lot compared to their actual positions when the head is turned since our ability to merge our vision and our inertial sense is not very good for the most part.
The same issues arises with AR/VR, it's useless to know a more accurate position of the user if it's not the present position, because then that will definitely lead to motion sickness.