Both. If you want bubbles, position it higher. If not, then lower.
I'm guessing your filter has a venturi. Normally, the venturi is a short length of pipe placed perpendicularly upwards of the outlet. When the water flows thru the outlet, air is drawn down thru the venturi and exits the outlet as bubbles.
Some brands come with a cap of sorts to cap the venturi when you want to use it near the surface but not want the bubbles.
The venturi is designed to aerate the water, where needed.
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