If only the packaging smells, then I agree, it's not damaged.
But they also said that sometimes the contents get smelly. That definitely qualifies as damaged.
Coffee smells come out a lot easier than cigarette smells, and you choose to go to those coffee shops, whereas the person I'm replying to does not choose to expose his brand-new clothes to cigarette smoke.
If I buy brand new clothes and they smell of cigarette smoke out of the package, damned right that means they're "damaged."