At the airlines I have worked at we wouldn't drop the masks, no real point as they mix the O2 with ambient air. We would suggest passengers cover their mouth and nose with clothing to filter out particulates.
If the smoke is bad, we would start a descent and then start to try and solve the smoke problem; upon reaching FL100 we would use the smoke removal drill - open the outflow valve fully and open the ram air valve to clear the cabin out, while carrying out a diversion.