Smart Update acts "on encounter" - it walks the drive and does what it's supposed to do at that moment. It doesn't "pre-delete" files.
So, if you (for example) rename a large folder, and we hit the "new" name before the old, we'll copy the new data before deleting the old. That can fill the drive.
Smart Delete will typically "note" this situation and, when we run out of space and know how much space we need, it'll look ahead and free up that amount of space so the operation will succeed. (There's a whole blog post about this -
https://www.shirt-pocket.com/blog/in.../smarty_pants/ - that you might find worth reading along with the Troubleshooting section.)