The filter is computed for each pixel of the texture. The Convolution Matrix describes the valence of a pixel (middle value) and its neighbors (the values around).

By multiplying all pixels in the neighborhood with its value in the matrix, summing up the products, dividing this sum by the Divisor parameter and adding the Bias value afterwards, the resulting color is calculated.

If you enable the Wrap Values option, color range exceeding values will be wrapped around (e.g. white becomes black). Smart Limitation makes colors, which are out of bounds, become scaled down to valid ranges without changing their hue.

With Recursiondepth set to a value greater than one, the filter input values are not taken from texture pixels directly, but from the already filtered texture, until the recursion level is reached. This increases the range of the filter.