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Smoke is an in-game indicator that a Blockhead is getting extremely warm and may start taking damage.

Lava and smoke

Appearance

Smoke is grayish in color and square in shape. It drifts up and away from a Blockhead, at first quickly growing and then shrinking. The rate of its generation is an indicator of how hot a Blockhead is.

Where Found

Being too close to magma, found deep underground at the center of the world, usually within 25 blocks, can raise Blockheads' temperatures to an extreme, causing smoke to appear. Dressing too warmly in a desert biome, or even in a really warm climate, may cause smoke as well. Eating too many chilli peppers too quickly will also raise a Blockhead's body temperature to a level that creates smoke.

Notes

The smoke given off by a too-hot Blockhead is different from smoke emitted by campfires, fire, or torches. The latter is darker, and for uncontrolled fire is quite abundant.