The "toilet paper" filter was and still IS a bypass filter marketed by a company now known as WeFilterIt Inc. Its name is the Frantz Filter and has been available since 1962.
It does NOT replace a vehicle's standard filtration system, but is sold as an "oil cleaning" system that is installed at the motor's oil pressure sender location. You can read all about it on their web site:
http://www.wefilterit.com/index.htm Back in the 70s my next-door neighbor tried to get me to join his multi-level marketing pyramid, selling these things. Not too long afterward, he was arrested for polygamy, although I doubt those things had much to do with one another. However, I always regarded him AND the Frantz filter as crackpots.