I'm not a DSP expert, but I understand that there are two ways that I can apply a discrete time-domain filter to a discrete time-domain waveform. The first is to convolve them in the time domain, and the second is to take the FFT of both, multiply both complex spectrums, and take IFFT of the result. One key difference in these methods is the second approach is subject to circular convolution.

As an example, if the filter and waveforms are both N points long, the first approach (i.e. convolution) produces a result that is N+N-1 points long, where the first half of this response is the filter filling up and the 2nd half is the filter emptying. To get a steady-state response, the filter needs to have fewer points than the waveform to be filtered.

Continuing this example with the second approach, and assuming the discrete time-domain waveform data is all real (not complex), the FFT of the filter and the waveform both produce FFTs of N points long. Multiplying both spectrums IFFT'ing the result produces a time-domain result also N points long. Here the response where the filter fills up and empties overlap each other in the time domain, and there's no steady state response. This is the effect of circular convolution. To avoid this, typically the filter size would be smaller than the waveform size and both would be zero-padded to allow space for the frequency convolution to expand in time after IFFT of the product of the two spectrums. 

My question is, I often see work in the literature from well-established experts/companies where they have a discrete (real) time-domain waveform (N points), they FFT it, multiply it by some filter (also N points), and IFFT the result for subsequent processing. My naive thinking is this result should contain no steady-state response and thus should contain artifacts from the filter filling/emptying that would lead to errors in interpreting the resulting data, but I must be missing something. Under what circumstances can this be a valid approach? 

Any insight would be greatly appreciated