A notch filter is used to cut or boost a very specific, narrow, frequency. It is the opposite of a shelf filter, that cuts or boosts a wide range of frequencies. When you work, say, the bass control on your amp, that's a shelf filter that boosts or cuts all frequencies below a certain range.
The notch boosts or cuts only a narrow band, for example, 200-300 Hz. There are fixed-frequency notch filters, and parametric notch filters, where you can find the offending frequency and then cut it (or if you want, boost it when using it as a tone control).
It's generally included on an acoustic guitar to cut frequencies that are causing feedback. It's also used a lot in live sound rigs for FOH mixing, because again, feedback is a problem from microphones. In FOH mixing, the frequencies that need to be notched are "rung out" and then cut when the ringing sound is found. It will vary from venue to venue due to room acoustics.
What PRS has probably done in designing the preamp is found the frequencies most likely to cause feedback when plugged in, and offered the option of cutting those frequencies.
Although you can use it as a tone control, it's really not intended for that purpose.
A mid-contour filter is simply a midrange / presence control.