Assuming that Anne could predict that Mrs. Smith, who has revealed herself to be the enemy of Mr. Elliot (though to be fair, one could conclude that Mrs. Smith is not to be trusted and imagine she MIGHT be playing some kind of double game.) could be assured that this information would get back to Mr. Elliot. So what? She simply says that she does not believe he is interested in her and that if he were he would be refused. Is this so shocking? It's the truth, which she only came to after she was hard-pressed. How would this humilate him? I would think, if it did get back to him it would save him the humiliation of further attentions and maybe even a rejected proposal, which would be far more public.

Yes, Anne could have remained entirely reserved and not hinted at her affection for another, but I think she was a bit desparate to prevent the whole world from making assumptions about she and her cousin. Coming so soon after the frustration of having CW leave the concert in a jealous rage, Anne is quick to try to deflect the "evils" caused by his attentions. This is just one more evil associated with it.

"JA usually and mercilessly punishes her characters for their unworldliness. I can only attribute this loss of mind to A's hankering for FW -- which is something I've never been able to fathom. "

It's a loss of mind to, when greatly pressured and backed into a corner, tell your true opinion of someone in a private setting? In fact, she shows rather more decorum than Lady Russell who makes the same speculations even though Mr. Elliot is a still a widow. Anne is the only one in the situation who has kept her mind, and has not run off half-cocked assuming that Mr. Elliot will propose any day.

It seems to me that your dislike for the object of Anne's affection has led you down a path to liking Mr. Elliot too much. Even if, as you implied in your earlier post, Mrs. Smith was exagerrating his blackness, he is still not a suitable match for Anne. Even if you completely disregard her love of CW, she would still not be in love with Mr. Elliott. As she says he is not open-tempered. His opinions are all too studied and perfect. In short, he is hiding something. Mrs. Smith's letter proves most importantly that Mr. Elliot told a bald-faced lie when wanted to be readmitted to their company by pretending that the whole break earlier was caused by a misunderstanding. The letter proves that the Elliott's perfectly understood his feelings toward them. He hated them and wanted nothing more to do with them. It proves him to be a hypocrite in his present attentions which is far more dangerous to Anne than anything he might have or might not have done to Mr. Smith.