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From what I understand, based on my experience using it, Smoke isn't so much a spell in the traditional sense, but rather an obstacle. In essence, it's a spell that creates an obstacle for ranged attackers. Unlike Mirage, which provides a +50% bonus to the target's ranged defense, Smoke doesn't affect damage at all. It simply causes arrows to "break" if fired through it. For example, it was shown that a shot would deal full damage, but when fired through smoke, the arrow broke and only dealt 1/2 damage.
Here's an example of Smoke in action:
In the army, there are two archers. The top archer has Ranged Attack skill level 3 (ignoring obstacles and distance), and the bottom archer has Ranged Attack skill level 1. In the middle is a mage with Smoke.
1) A normal attack from the archer with Ranged Attack skill level 1. As you can see, the arrow is damaged, dealing 1/2 damage.
2) An attack from the same archer, but now targeting a unit obscured by smoke. As you can see, it deals 1/4 damage.
3) A normal attack from the archer with Ranged Attack skill level 3. There are no issues here; the arrow flies straight.
4) An attack from the same archer, but targeting a unit obscured by smoke. As you can see, there is no change.
That's all there is to it. Smoke is just a regular obstacle