Hello! This recently happend: Morlock runs into LoS of enemy line trooper and enemy flash bot. Flash flashes as an ARO and line trooper shoots. Morlocks throws a Smoke so it blocks LOS of both enemies. Everyone passes their rolls, Morlock beats line trooper, but flash bot beats Morlock. What ends up happening? We played it like Morlock dodged the line trooper shot, got hit by flash and Smoke isn't on the field (because it seemed right, not because we knew exact specific rule).
That's it. Flashbot wins the FtF, so there is no smoke on the table. Morlock has a higher success than enemy line trooper, so avoid the shot.
It is even in the wiki example http://wiki.infinitythegame.com/en/Smoke_Special_Ammunition Example of Impact Template weapons and Smoke In his Active Turn, a Shaolin Monk decides to lob a Smoke Grenade at a few Fusiliers in order to sneak up on them. The Shaolin declares a Special Dodge with his Smoke Grenade and places the Template on the table. A total of 3 Fusiliers are affected by the Template's Area of Effect. Two of them declare BS Attack as their ARO against the Shaolin's declaration. This means there are two Face to Face BS Rolls against the one PH Roll made by the Shaolin. The third Fusilier does not have LoF to the Shaolin but, being affected by the Area of Effect, he can react with a Dodge in ARO. He declares Dodge so that, if he passes his Roll, he can move outside the Template. In this situation, the Fusilier must make a Normal PH-3 Roll to Dodge. The dice roll, and the Shaolin does better than the two firing Fusiliers, so he gets to leave his Smoke Circular Template on the table and avoid both attacks. Meanwhile, the Dodging Fusilier passes his Normal PH-3 Roll and moves 2 inches to get outside the Circular Template. Imagine that one of the Fusiliers who declared a BS Attack loses his Face to Face Roll against the Shaolin, but the other Fusilier who declared a BS Attack wins it. In that case, the Shaolin would avoid the first Fusilier's Attack, but would be forced to make an ARM Roll by the second Fusilier's BS Attack. In addition, the owner of the Shaolin would have to remove the Smoke Template from the table.