What she doing?

Amy and I have been talking a lot lately of how Keira is looking outside her general suroundings to observe and comment about the world. An example:
Saturday she and I were going to the mall. It was mainly an excuse not to watch "Bob and Larry" and since it was still too cold to go to the park, I packed her up and off we went. We are driving and talking, mainly about where mama is and what we are going to do when we get to the mall. You know, the play area, the disney store, B&N so she can play with the trains, all the good stuff you can do at the mall.
We pulled up to a light, and I am waiting for her to start talking about the traffic light. "Red means stop, Yellow means slow down and Green means go!" Instead I got, "What's that all about?" I looked around the car and said " What's that?" I looked back and she was pointing to the car next to us and when I looked over there, a young woman was holding a cigarette. Keira then said, " What's she doing Papa?"
So in my head I am thinking about how do you explain what smoking is to an "almost 2 year old." I initially thought that I could just ignore it, but then I thought that maybe I could tell her and let her decide what to make of it. So I said, " She is smoking a cigarette." I hear from the back, " Hmm, she smoking Papa?" I replied, "Yes bug, but it isn't a good idea to smoke." " It isn't good for your body."
It is silent for a moment and then I hear, " She isn't being very nice to her body." The light turns green, the other car drives off and Keira and I go on our merry way.
Then yesterday we went out to dinner and we are enjoying our meal. Keira looks over to Amy and says " Mama, what was that girl doing out her window?" Totally out of the blue, so Amy was a little lost. I reminded Amy that this story was about going to the mall, and Amy asked" Was the lady smoking?" Keira replied, " Hmm, yes but she wasn't being very nice to her body."
What two year old does that sort of thing?