As I mentioned above, there is always overpressure from the nitrogen bottles to ensure a rapid inflation - that overpressure has to go somewhere - you can hear it escaping from vents after inflation (the same happens on survival dinghies).
The smoke came before inflation ... do I have to say more? And before any venting could happen. Do I have to say even more?
The nitrogen is stored under pressure in this case, not as a liquid. As a liquid you don't store it under pressure. You definitely don't want liquid nitrogen flowing into rubber bags and I am not even talking about valves and seals. That would not end well. Even if it vents out, you may see a bit of fog in the stream of nitrogen, because vapour in the air will condense around the now cooler nitrogen, but not like that. Liquid nitrogen boils at 77K. You will have a hard time to cool nitrogen to 77K only by expanding it. The pressure in the bottle would be way more than necessary, given the size of the bottles, and very very dangerous.