It's been possible for a long time, but kinda hidden. See released tools for example.
I am somewhat sure that the filter was accessible on the left a few months ago. I do remember browsing for released games and not activating it via Directory. Might have activated by clicking In Development from a game, but either way, once it gets "activated" it is a regular filter on the left after that, as long as something is selected.
I see reasons why it could have been hidden away, as it is not a very accurate filter, but might also be some css oversight after some update.
Speaking of css, as a side note, everytime there is a sale, I have to change zoom to access Community and Feed in the top row, as they get hidden behind the search box ;-)
The filter can be found by clicking into the “Directory” link on the very bottom of the site: https://itch.io/directory