Smart Objects has 2 purposes:

1. Convert an image to a smart object in order to retain it’s quality even when you size it down then you want to revert it’s size back to the orginal.

2. Select two different layers and convert it to a smart object. It will result of having 1 single layer after that. But you can double click the smart object icon on that layer in order for you to edit the smart object with separate layers.