A) Does not extend off of the building: B) Does extend off of the building: Does smoke extend off of horizontal surfaces? The examples are not clear. I think most people play that it does extend off off horizontal surfaces, but want some clarity. Relevant rule: Smoke Templates, as their Area of Effect have infinite height, form a cylinder that will be affected by scenery elements. The Area of Effect will be cut horizontally and vertically by such scenery elements (see the example).
I think that the smoke emanates straight up from the whole circular template, but stops if/when it hits a scenery element. That's what the diagrams in the rules seem to show. "Cut horizontally and vertically" isn't a great way for the rules to describe that - I would probably have said that it's "cut vertically" meaning that it emanates vertically except where any particular part of the vertical column gets cut off by scenery. But they seem to have put in the "horizontally" part to specify that if the scenery only sticks partway into the column, it will only cut off the parts of the column that it blocks (i.e. it cuts horizontally into the column from the side). Like, I guess scenery that cuts horizontally into the area of effect cuts the area of effect off vertically. Anyway, I don't see anything that says that the area of effect is cut off by part of it not resting on scenery, so I think the answer has to be (B).
https://infinitythewiki.com/Smoke_Ammunition The area is cut by scenery elements. As it doesn't go up above the balcony in the example pictures, it doesn't go down in the described situation
I would also go for option B. There is nothing above the smoke template to prevent it from flowing upward.