In this paper, a new signal separation method mainly for AM-FM components blended in noises is revisited based on the new derived time-varying bandpass filter (TVBF), which can separate the AM-FM components whose frequencies have overlapped regions in Fourier transform domain and even have crossed points in time-frequency distribution (TFD) so that the proposed TVBF seems like a “soft-cutter” that cuts the frequency domain to snaky slices with rational physical sense. First, the Hilbert transform based decomposition is analyzed for the analysis of nonstationary signals. Based on the above analysis, a hypothesis under a certain condition that AM-FM components can be separated successfully based on Hilbert transform and the assisted signal is developed, which is supported by representative experiments and theoretical performance analyses on a error bound that is shown to be proportional to the product of frequency width and noise variance. The assisted signals are derived from the refined time-frequency distributions via image fusion and least squares optimization. Experiments on man-made and real-life data verify the efficiency of the proposed method and demonstrate the advantages over the other main methods.