I find foiling helpful in evening out cooking. Since heat in the wsm is concentrated on the outside of the cooking grate, the outer edges of long shaped meats (whole rib racks, whole briskets, etc) get done before the center. I can't say my science is correct, but my thought is that when the meat is foiled the whole piece is being steamed similarly, and it won't really get the middle caught up to the ends, but it will get the middle to tender before the ends are way overcooked.
Meat does not absorb smoke, it clings to the surface. The idea that smoke is only absorbed during the beginning part of the cook has only to do with smoke ring formation not actual smoke flavor. IMO, a watery foil stage can remove a bit of the smoke giving the meat a washed out flavor. I stopped adding liquid to my foil for this reason. Smoke can always be added back on after foiling, but really, with the wsm, getting enough smoke flavor should never be a problem.