Just to say I have just updated to 5.3 and this has no effect on the problem.
Also, I tried creating a smart collection and it exhibits the exact same problem - a rule 4* or greater works fine, 3* or greater does not.
It's bizarre and a complete pain!
SOLVED - I optimized the catalogue. I was then prompted that the catalogue was corrupt. I ran a repair and now rating filter works as expected. Thank goodness.