Thalmerite is not used up in smoke reaction.

[Cogwerks]

Uh, yeah, that's pretty much what I just said. It isn't included in the smoke. It can trigger a time delay smoke, but the thing that depletes available chemistry and transfers it into a smoke cloud ignores thalmerite and a couple other blocked chems.

Unless the smoke is spreading thalmerite despite the block, there's nothing wrong here. The smoke powder just isn't carrying any thalmerite with it, as intended.