Storm in an ashtray. A small mistake was made by an employee of a shop, no real harm was done, and an apology, admittedly a pretty pathetic one was issued.
I believe, and I may be wrong as I've never needed to know, that it is illegal to serve alcohol to members of the armed forces in uniform. From there, it is only a small step to think that it may be illegal to serve them cigarettes, however irrational that may seem.
Much as I dislike smoking, people should be allowed to do so in their private space and time. I would not expect to see uniformed members of the services smoking in public, but if they do, I'm not going to let it worry me.