Technical info: Photoshop v22.5.5, MacBook w/ Retina Screen, Mac OS 11.6
When I downsize a photo that is a Smart Object, it appears to use Bicubic (Sharper) even when I select "Bicubic (smooth gradients)". To replicate this issue, simply open a high resolution photo, duplicate the background, convert the duplicated layer to a smart object, then reduce the photo by a large amount using "Bicubic (smooth gradients)" for the resample type. Zoom in to 400% and then compare the two layers. The smart object will be sharper than the background layer since it apparently uses Bicubic (Sharper) no matter what resample type is chosen, whereas the background layer was reduced using "Bicubic (smooth gradients)". Here is an image that shows what I am talking about using the exact instructions mentioned above:
The raster background layer is on the left, and the smart object layer is on the right. The image is a screenshot of the image zoomed to 400%.