The Bilateral Blur effect selectively blurs an image so that edges and other details are preserved. Areas with high contrast—where pixel values differ by a large amount—are blurred less than areas of low contrast.
The primary difference between the Bilateral Blur effect and the Smart Blur effect is that edges and details are still blurred a small amount by the Bilateral Blur effect. The result is a softer, dreamier look than that achieved by the Smart Blur effect with equivalent settings.
The result of the Bilateral Blur effect is very similar to the result of the Surface Blur filter in Adobe Photoshop.
This effect works with 8-bpc, 16-bpc, and 32-bpc color.
It adds a sort of ‘dream’ effect to it.
Radius: Radius only affects your blur when there is a value for threshold. Basically it is the distance a source is allowed to reference for the blur. So the larger the radius, the longer it will take for each frame to render; but the result will look much better.
Threshold: Bringing the threshold value up will make everything more blurry. While radius is the amount of samples AE will make, Threshold is how much it will ignore those sharp edges. The higher the threshold, the more blurry everything will be.
Colorize: If you do not check this, the final image will be monochrome because AE is sampling from the Luma level of the image and not the Red, Green, and Blue values. If it is checked, it will use all 4 values(RGB + Luma) to create the blue.
Image from personal collection
After Effects Library 