Most piston-engine display aircraft now use 'smoke oil' rather than diesel, as it is cleaner all round and environmentally friendlier. It is commonly referred to as Ondina, which is a bit like calling all vacuum cleaners 'Hoovers', and the commentators do like to say it is just like baby oil. I don't think there was any connection between Guinot and smoke oil however. For those jets which still use diesel, it is pretty smelly, but I'd be more concerned about the dye. They don't 'spray' it over the crowd, as they don't generally fly over the crowd, but it will drift a long way downwind.
There have been Hawk dye incidents with smoke valves open on the ground. At Valley in the early 90s a number of cars behind VASF were dyed red and were professionally valeted at public expense very quickly and with no questions asked it seemed, which naturally gave rise to conspiracy theories. Clothes on washing lines on the patch were lightly covered in red dust.