Dossier
Vice City is a surveillance environment. Cameras, witnesses, helicopter observation. The smoke grenade temporarily removes all three. Not permanently. Long enough.
The primary use case in Leonida is extraction cover. Drop the smoke between the departing operative and the pursuing law enforcement. The pursuit has to slow or stop while the cloud persists. The operative does not slow.
Secondary use is positional cover. Moving across an open area under fire becomes significantly less dangerous when the line of sight from the firing position is obscured. Twelve seconds of smoke does not solve the problem but it moves the problem to a different location.