Smart Object & Blur

I'm not entirely sure what you want to ask. If you create a smart object before applying a blur, you gain the ability to adjust the amount of blur and restrict it to specific areas of the image, as shown in your example using a filter mask that will be automatically generated. You can achieve a similar effect without a smart object by duplicating the image layer, applying the blur to the top layer, and then masking or erasing parts of the upper layer. However, you will lose the flexibility mentioned by @jane-e