A common tactic in rogues is to get invisibility, hex a target, and then guidance buff the rogue/thief and pickpocket for optimal chances. Having invisibility, or a cloud to shroud them protects from the sight of others walking around which can potentially cause the class to get cough while stealing.
But the ability of creating a smoke cloud would only mean a higher chance of coughing
Putting someone in a cloud/smoke/darkness is an attack. If they see you, you will enter combat. If they don't, they will exit the cloud as quickly as they can, so it doesn't help with pickpocketing.