Hell yeah! Finally figured it out! Behold, the better item filter:
Right to left - broken, common, magical, rare
After some testing, it turned out that if you add a color tag to a Broken item prefix OR a common Quality tag, it overrides the main item text. The rest was easy - only had to make all magical items common. So right now there are both "normal" and "magical" commons, but because of the quality tag you can see the difference right away
I'll release this soon as a standalone mod, before merging it with Enhanced Gameplay.