The smooth toggle is working as intended, but the difference can only be noticed if you are zoomed in really close to the image. When the toggle is off, you draw only with whole numbers as coordinates, when it is on, floating point numbers are used as the drawing coordinates. Again, this difference can only be seen when you are zoomed in, something like >500%. Unless you have better eye sight than me, then you might notice it earlier
I should do something about the hardness 100% and anti aliased pixels thought, that is definitely not working like C2.