Yeah, I've thought similarly. I actually consider multi-candidate Smith Sets a feature though, not a bug. Because I believe it means the electorate is honestly confused and not ready to make a decision yet.

So one option is to hold a runoff between the candidates in the Smith Set.

Another is crazier, but I haven't found a flaw yet. Basically introduce range/score voting on the ballot, but only use the scores if there is a multi-member Smith Set. That way you guarantee Condorcet compliance. And since the voters don't know if the ranges/scores will be used (and they probably won't), they don't have incentive to strategically score a less-desired candidate ahead of a more-desired candidate.