Love this idea. Great suggestion. I would also suggest that the smoke, when thick enough, blocks sight through it even if you're not in it. So basically, you could throw smoke down a corridor between you and the enemies and after a turn (assuming it works like other gas grenades and slowly builds thicker gas pockets) it would block sight down that corridor. Another bonus to capsules could be that it releases thick clouds immediately instead of a slow release smoke grenade that might last longer and cover a bigger area but take longer to deploy.
I would also suggest that stealth characters, when moving through it, have to make a Con save every time they're affected by a 'suffocating' debuff to prevent coughing that reduces their stealth by a certain amount. Naturally, gas masks would remove the penalties for standing in smoke since they protect both the eyes and the lungs. Though you would still have to hug the edge of the thick smoke pockets to be able to see out through the thinner smoke pockets, otherwise you would be blinded by the surrounding thick smoke too.
If enemies see smoke then I would suggest they react to it like they do with broken cameras. They don't immediately turn hostile or know where you are but they come to investigate. Though, maybe not through the smoke unless they're wearing a gas mask. That way you could also use it preemptively to sneak through well guarded areas.