Ball valves would do the trick too. I guess there's a million ways you could plumb this- whatever is to your liking, I guess.
As far as they bypass part, since the coolant flows to the heater core(s) and filter simultaneously, I would presume that would make it a bypass. If you forced all the coolant to go through filter than the heater core(s) it would be full flow. I could be completely wrong on this point.
I initially had all the flow from the water pump go to filter, but I believe the 3/8" orifice and filter provides too much restriction to allow adequate flow to the rear heater core. In a truck without a rear core, a direct flow provides adequate heat, but when the filter fills up, the heat will go away. Plumbed as shown in the diagram, the heat will always work regardless of filter efficiency. I judge flow based on the heat difference between the input and output houses of the filter. Not precise, but adequate indication of coolant flow.