That's odd about the safty code. I always thought it was pretty darn clear. If it remains attached to the plane, it's fine. "smoke bomb" refers to dropping a burning/smoking object, hence "bomb". I mean, JATO is allowed, and that gives smoke and thrust (and maybe cool fire/flames). So you'd think smoke but no thrust or fire would be pretty obviously allowed.

Is this "debate" you talk about actually in the AMA, or just some guys at your local club or in some online forum?