Fire sources create smoke "objects" (a bubble that is just under a meter in diameter) that determine where smoke is seen and where smoke damage is taken. Each bubble floats up at a certain rate and can be redirected/constrained by construction objects and other smoke objects. The fire source cannot create another smoke object if there is an existing one in the way and will briefly snuff itself out if it goes too long without being allowed to create more smoke (it will immediately re-light once it's able to do so, but you're without fire benefits in the meantime).

This makes it possible to create safe smoke chambers without any kind of venting. The trick is in designing it to be able to hold enough smoke that smoke objects will despawn as quickly as they're being created without backing up so much that they get in the way of the fireplace staying lit (or spilling out and becoming a hazard). To make sure you never see the smoke trying to puff out of the box, create a second set of walls and floors inside it that is a half-meter from the surface in question.

In my case, I usually just add an extra two-meter space above each level of my house/keep, with holes on the underside for the fire sources to smoke into and walled spaces for stairs to run through.

Next time I have time to hop onto a server where I have finished construction work, I'll take some screenshots of what I mean.