The smoke is not produced by the explosive.
It's produced by whatever was destroyed on the tile.
E.g. a C4 explosion doesn't produce much or any smoke itself, but all the dirt on the ground will be propelled into the air and create a fine dust cloud.
If you want to turn that off, you can set the tile damage of the explosive to zero.
(Or to a small fraction, e.g. 0.2, if you just want to create a smaller dust cloud)
items:
- type: STR_GRENADE
damageAlter:
ToTile: 0.0