As Spiral_Architect says, there should be a note that makes it clear what happened and I agree with fylimar that this both made sense and was very sad. Definitely one of the moments that packed an emotional punch for me.
Oh yes, especially, since the smith seems to be a bit grumpy, but not a bad person and his co worker, the very happy dragonborn lady (who btw is so wholesome) will probably be sad. I hope, she wasn't too shocked, when she did go looking for him and he wasn't there anymore.
Same with that very enthusiastic reporter, I'm glad , I didn't have her as Orin yet.
I had the racist soldier though, and I 'm not sure if that racism was just Orin messing with us or if the guy really was that unpleasant.