I think in general there could be further clarification around how Smart Sync works with Teams/Businesses as the setting seems to mainly apply to how it operates for an individual.
Further if I understand the functionality correctly the notion is that if a folder is set to sync then any and all future files/folders added to the top level folder will sync. If there was an option for sync one time vs sync in perpetuity. Like download everything currently in this folder but don't download any future files added online, on other devices or by other users. Unless this is how the smart sync setting mentioned above works. It's unclear.