As the horn section you met has demonstrated - smoking and brass playing are not completely incompatible. People can play brass, and play well, despite smoking, at least for a period.
Smoking definitely damages your ability to breathe; it reduces lung capacity; it stiffens lung tissue; it narrows breathing passages; it causes excess mucus; it reduces blood supply to the muscles; it reduces the effectiveness of the immune system, allowing other things to attack the pulmonary system.
But playing a wind instrument, by exercising the lungs and the corresponding muscles, temporarily counteracts some of those effects. A young smoker who plays brass regularly may well have stronger lungs than a non-smoker who does no exercise.
However, smoking will catch up with you eventually. As a smoker gets older, the damage to the lungs increases. It's entirely realistic that a smoking brass player would reach a point perhaps in their late 60s where they hadn't the puff to play any more -- which is a pretty miserable fate for someone who loves to play music.
That's assuming that you don't die of a different smoking-related illness before your lungs go -- throat cancer, stroke, heart disease. But those are not topics for a music Q&A site.