Fibre Bragg grating (FBG) sensors have long been thought of as the ideal sensors for structural health monitoring (SHM) due to their small size, light weight, ability to be embedded and ability to be multiplexed. So, FBG sensors have been commonly used for strain based SHM. Their use for ultrasonic guided waves (GW) measurements in the traditional wavelength division multiplexing approach was tried as well, but did not get accepted widely due to the low sensitivity. In the recent times, a renewed interest is seen in the use of FBG sensors for GW measurements using the edge reflection approach which increases the sensitivity several folds. This paper reports a very interesting phenomena, shown by the FBG sensors. The mechanism of the measurement of the incident GW is different based on the relative ratio of the wavelength of the incident GW (λGW ) and the grating length (L) of the FBG sensor. For λGW /L >> 1 the propagating wave leads to uniform strain over the FBG resulting in the shift of the Bragg wavelength. For the λGW /L ≈ 1 the FBG experiences non-uniform strain over the FBG which results in the distortion of the spectrum (widening or narrowing) of the peak. By separating these effects on the FBG, mode filtering may be achieved. The mode-filtered data is then used for damage detection and damage localization. Modifications have been proposed to the elliptical approach which makes use of the filtered modes and removes the unwanted peaks in the signal stemming from the other mode. The methodology is validated on a simple aluminium plate with simulated damage scenarios (added mass). The results indicate that indeed the mode-filtered signals improve the damage localization performance of the actuator-sensor network.