What is the use of a small filter on the outside of the cylinder head on a car?

It's called the cylinder head cover.
Effect:
Covers and seals the cylinder head, keeping oil inside and contaminants like dirt and moisture out. In addition, the cylinder head cover isolates the oil from the air, and during the operation of the engine, an oil mist will form. The cooler inner surface of the cylinder head cover will collect the oil mist, causing the oil to condense and flow down the oil sump.
The cylinder head cover is also responsible for crankcase ventilation. As the piston moves in the cylinder, pressure builds up inside the engine. If left unattended, this pressure can cause the various seals to leak, resulting in reduced engine efficiency. To avoid this, a pipe is used to connect the cylinder head cover and the intake port for combustion ventilation air.