And I was spotted before the Smoke...

[Blackcloud6]

8.22 answers this: "...OR is outside the enemy LOS..."    So, the spotted marker should come off if there is no other LOS path from an enemy unit to the hex.

Clever use of defensive smoke, which is thing you know.   "We're under heavy fire, drop smoke in front of our position."  Then the leader tuns to his troops once the smoke falls: "OK boys reposition and keep your heads down."