Hi,
smoke grenades are not supposed to hurt anyone.
They also don't hurt anyone in OXCE, same as in OpenXcom and in the original... unless you have specifically modded them to do some damage.
M.
Alright, I did a little bit of testing (downloaded latest OXCE version 6.5, got the files from steam, installed on a clean computer so no mods or previous saves). And it seems like the 'instant grenades' option turns smoke grenades into normal grenades in OXCE (the damage is applied on hit, same as normal grenades, and the ground gets visually scorched alongside the smoke).
I then downloaded OpenXcom on another computer and the instant smoke grenades seemed to work properly there (no damage, no visual changes other than the smoke).
Disabling instant grenades in the OXCE version of the game makes smoke grenades work 'properly' again (not sure if it affects any other weapons, I only started playing a week ago and haven't gotten very far).
This is all in the base game, I have no other mods installed and haven't really touched the other options (yet).