The phrase “smoke test” was lifted from the construction industry. During this test, water pipelines would be filled with smoke to see if there were any leaks and other underlying issues.
In the tech industry, smoke tests were first used for hardware testing. In this test, hardware boards were tested to see whether they would smoke once they were plugged in and turned on. If they did emit smoke, they would fail the tests and were immediately unplugged. If they didn’t, they’d move on to the next round of testing.