I keep thinking this is a very simple matter and my IQ has slipped a few digits but nevertheless i can't find the answer to it. It involves what I think is color information in transparent pixels.

The information is still there in your "in-memory" image, the transparent pixel color information is no longer present in the disk file. If you were to perform a "File->Revert" (or otherwise reload the disk file) then your in-memory version would no longer have the color info for transparent pixels (transparent pixels would all be black).

The situation is similar to what occurs when you save a multi-layer image to a JPEG file; the image you are editing (the in-memory version) will still have multiple layers even though the one on disk has been flattened. It is only after you load the disk file that you will be editing a flattened image.

1)
That is fixed in the new version, the new version has a new name Graphic Novel Fx (to avoid confusion "2" could seems a version number)
Now the filter respect transparency and the selection

New version may be soon available trough filter update, and in case you are impatient, is already posted on this side
(the version on this side don't conflict but don't remove the older and will appear on the very top...that from update will replace the older and, i suppose will show up in the Artistic menu )

2)
2 tips when using the filter with images that have large uniform bright area with no detail (as very bright sky or white BG)
A)
Check the first box (Skip this step) to avoid halo.
Halo could be cool so check the preview to check what you prefer
B)

You may wish first to just unselect the sky or the blanc BG ,now the filter respect the selection

That makes perfect sense, thanks. I had a few strokes, one really bad one in 94, because of that sometimes the more I try to remember of figure out something the less it happens. Your answer makes more sense this morning than it would have last night.