What is meant by "information encoded in time domain"?
The simplest (imho) explanation is this.
Consider a time-domain signal which has narrow pulses or sudden jumps in value or on/off switches at certain (unknown!) time instants. Such a signal is said to carry its information in those specific time instants at which such sudden changes occur.
A PWM (pulse width modulation) signal is an excellent example for such class of signals.
If you consider the frequency domain reflection of those sudden changes in the signal amplitudes, you will see that they have wide band spectrums. They are local in time, therefore spread in frequency.
When you filter such a signal with a typical LPF (low pas filter) or alike, which discards parts of the spectrum away and passes only a subset of it, you may effectively be throwing away part of the information that's carried by the signal too.
For example, the specific instants at which the PWM wave switches on/off becomes blurry, and hence the resolution of the information is reduced.
The author seems to mention this issue with filtering of time-domain encoded information...