Nothing should ever be able to create blue smoke. Fuses prevent that. Yes you can use a breaker or switch to control something but the wires between things are protected by fuses. The charger/converter could indeed smoke but your protection would be the 120 v breaker. If the battery on the other end of that circuit was to short out the fuse would keep the wire from turning into a heater or potential fire.
It's all about protection and building for the worse case scenario. Will worse case happen? Usually it never does but we protect against it because the price is so high when it does happen.