Remember Ilana asking Ben if MIB killed Jacob- I'm pretty sure that's how it went. She said that MIB can no longer change form now. IMO when she saw him as Smokey she knew MIB didn't kill Jacob because he changed form. Therefore, this answers the question of what happens if MIB kills Jacob and mabe even a candidate. Her statement doesn't imply the war is won or he is now stuck on the island.