Spore Puff

Smoke bombs can only be found in Farm Arrays. They look like grey balls with a smoking fuse connected to it. Like many other objects, you can carry two of them at a time and one can be stored in your stomach. When thrown, the area of effect will be covered with smoke for a short time, blinding your enemies. The resulting smoke can kill bats or be used to attract rabbit walkers. When a rabbit walker is near, it can be fed a smoke bomb to lower it to the ground. From what Big Sister Moon tells you, it can be concluded that these smoke bombs are some type of fungus. It's the flowering body of a fungus that eventually bursts and releases its spores.

It is theorized smoke bombs are the same species as the mushrooms, but this has not been proven.