Bennett and the England management, which includes former national captains Kevin Sinfield and Jamie Peacock, had offered clubs £10,000 per player in compensation for the Dubai camp.
Bennett is halfway through a two-year contract, but failed to get England into the Four Nations final at Liverpool last month, losing to the Kiwis and Australia in preliminary games.
He recently claimed to have the backing of the Super League coaches, but Smith, St Helens boss Keiron Cunningham and Hull coach Lee Radford all expressed their opposition.
"I totally disagree with the rationale behind it," Smith told the Warrington Guardian. "I don't understand it whatsoever."
Smith said he expressed his concerns to Bennett, who was thought to be intending to attend only part of the camp, since it clashes with Broncos preparation for the new NRL season.
An RFL spokesman insisted Bennett will remain in charge and that the England team are now focused on the mid-season test in May, but the about-turn will be seen as major embarrassment to the RFL, who were keen to support Bennett.
RFL chief executive Nigel Wood played down any talk of a club-v-country row at an end-of-year media briefing earlier this month, but he has clearly bowed to pressure from Super League clubs, who were forced into arranging a second set of back-to-back fixtures to accommodate an early start to the season.
Several clubs will also be without their leading players when England play their proposed international against Samoa in Sydney on the weekend of May 7.