Seems my last test in TMO was about 12nms. I would assume we could extend the range of the flat would in game, but graphically, not sure what would render at further ranges. The game does render the effect at long range, where you may only see the mast, funnel or top part of the ship. I'm fairly sure for smoke to generate, you have to see some part of the ship.
Be nice if we could see smoke onlyon the horizon, but it's not a hard object in game that can be IDed.