Iirc smoke will block line of sight, and any unit firing into or through the smoke will incur an accuracy penalty. This is so even if there's a 2nd spotter unit in the smoke it will still serve its purpose of keeping your units protected and not suppressed.
If I understand you right, it doesn't work this way, exactly. Even if you have a spotter in or outside the smoke, it pretty much acts like a shot blocker, so units with small arms will run around stupidly trying to reach the target. This lasts only during thick smoke though. I think we likely will need a more advanced research though, to determine what's actually happening. The thick smoke behavior is easy to understand just from playing. The problem is when you look in the stats and find there is smoke cover. It kind of doesn't make sense that there is a smoke cover since smoke is acting a lot like a shot blocker(just you can attack ground through it). It may be possible that when it thins, the smoke cover takes effect at that time. The smoke cover could be active the whole time, but while the smoke is thick it's useless, because no targeting is possible. In coh1 it didn't act like this, you could still target in the smoke, just the smoke cover turned accuracy and suppression to almost nothing.