I think it is incorrect.
From my understanding:
ZFS and SMART don’t interact with each other.
ZFS only looks at the content of the data, ie the Blocks in ZFS terminology, ie the information.
SMART reports statistics about the life/health of the drive and the firmware handles all the checks at the physical level, ie detection and relocation of bad sectors, head actuator related issues….
The nuance here is:
Bit rot is generally caused by the degradation of the magnetic field in the structure that is used to store the state of the bit. The magnetic field will decay over time. The magnetic field can degrade more quickly or change state (North-South (“+”→”-”) to South-North (“-”→”+”) or become unmagnetized, ie no magnetic field) when external forces are applied, ie magnetic heads writing data in the vicinity.
In the old days of the magnetic tapes (still valid today), there were 2 types of degradation, one being the bit rot, the other being the transfer of information from one layer to the other, known as, “print-through” Print-through - Wikipedia (I had to google it).
ZFS won’t know the strength of the magnetic field for each of the bits the HDD is reading from. What ZFS does is to request the HDD controller to fetch the data in form of blocks. Within a block, there is a field (not the magnetic field), known as checksum, its value is calculated from the data that is going to be written within that block. Hence, the “block” contains both the raw data and the checksum.
When ZFS reads a “block”, it will read the raw data as well as the checksum stored in the “Block”.
ZFS is going to run a check on the data to see if it is valid by comparing the value of the checksum read from the “block” and calculate another checksum based on the raw data. If both checksums are identical, then the “Block” is good or healthy and the raw data is trustworthy.
However, if the checksums are different, it means some corruption has occurred within the “block”, either or both of the stored checksum and raw data have change over time. There is still the possibility of an incorrect checksum calculation done in RAM, but this is not what we are concerned about here.
When ZFS detects a corrupted “block”, it will try to generate a new “block” using the redundant data available from another disk (ie within a mirror, or RAIDZ1/2) and write the new “block” into a freely available area of the disk. The existence of the old corrupted “block” which is stored, or pointed to, in the pool metadata (I think) will be released and replaced with the location of the new “block”.
The space used by the old “block” now becomes available to be used by ZFS.
At the hardware/physical level, it is possible physical damage of the magnetic layer can occur, due to wear, impact…, causing the affected area to no longer hold a charge, and this is where the firmware on the HDD react.
The firmware will exclude the damaged area (ie sector) from being used, either read from or written to. Removing a sector from the disk means that the amount of data usable on the disk will shrink as the number of bad sectors are being taken out of service. In order to prevent the loss of capacity, spare sectors exist and are activated to take the place of the old sectors. This allow the disk to maintain its nominal capacity.
If the spare sectors have been all used up, the disk won’t be able to reallocated future failing sector. Anyway, the drive should have been replaced long ago.
If a damaged sector didn’t hold any data, ZFS wouldn’t know about it, but the firmware would have substituted the sector with ZFS being the wiser.
However, if one or more “block” already existed on the damage sector, the HDD could discard the existing data within the damaged sector or could try to copy what it can to a spare sector (I personally don’t know if the disk is handling any type of copy). Either way, there is a high probability that the data copied over is already corrupted. I also do not know if and when a sector is being reallocated, ie does it happen only during short or long SMART test or is the firmware/hardware handle the operation dynamically outside of a SMART test.
In any case, ZFS will detect the corruption or the absence of “block” and will trigger resilvering of those blocks when redundancy is in place. Those “blocks” will be written in a new freely available location as describe earlier in this post.