No schism at all happening here. It depends on how strong the allegations and final results of the investigation are, but I really don't think anything will come out of this party wise. You might see some backbenchers say something, but unless they're not running for re-election then yeah they're going to be silent.
However, Smith claiming in any way that she doesn't know or green lit anything is completely false. Either she's immensely incompetent beyond all reason (not knowing what your Chief of Staff was doing) or she's blatantly lying. The Premier's Office has a pulse on literally everything the party caucus does, especially the cabinet.