Smart Content is just a different way to organise (some of) the user-facing files (the ones that you see in the panes.) It shouldn't make a difference to the asset files, which are hidden from sight.

I really don't understand the issue here - the base figure is obviosuly installed correctly or it wouldn't load at all, the characters seem to be installed correctly or their textures would give errors on applying materials, and apparently the morphs load and work in some situations but not in others. This is really weird given the way fiels are grouped for installation and the way in which they are loaded. It might be useful tp post the fuil log, and also the full log from successfully loading a character in which the associated morphs do appear - if you zip them up and post them to soemthing like OneDrive or Google Drive or DropBox you should be able to post a link - but I am not sanguine about being able to figure anything out.