SmartBlock just stands in for that blocked script, acting just enough like the real API to prevent some common site breakage.
This lets it detect when sites try to open the popup-based authenticaion flow, unload the stand-in script, load the real one, and continue the login flow.
It only unblocks some Facebook resources, as listed here: https://searchfox.org/mozilla-central/source/browser/extensi...
It only unblocks it for that specific website (the domain in the tab URL), and only until Firefox is closed. Other trackers continue to be blocked, and other tracking protections stay in place (as opposed to turning off ETP for the site entirely).