It's very much a thing .. and has been around for a long time. They tend to get used mostly on diesel trucks, but they will work on just about any engine, if you have the room to mount one, etc..
Also, the standard filters for these are not actually toilet paper, but people figured out that it's far cheaper to find a decent roll of toilet paper and use that, instead of paying for the more expensive filter elements that are actually made specifically for the filter.