Redirection can occur multiple times, the damage being reduced by Smoke Bombs would only happen once.
With the wording what would happen is Scholar and Stealth Bot would both be able to redirect the damage to themselves at the same time. So the Players would choose which one to redirect to.
If the Players choose to resolve Scholar first they then have the option to redirect to Stealth Bot.
If the Players choose to resolve Stealth Bot and redirect it, Scholar will then redirect it to himself.
Each time Scholar would be dealt damage players have the opportunity to redirect it to Stealth Bot.
Each time Stealth Bot would be dealt damage Scholar will redirect it back to himself.
The result is an infinite loop that lasts exactly as long as you decide to have it last, before you let Scholar deal with the damage.
The reduction on Stealth Bot works as a simple yes/no question:
Was the damage redirected by Stealth Bot's effect? If so reduce that damage by 1. No multiple lowerings, and the effect doesn't expire from being redirected again.
If you have multiple "Must" redirections competing for the damage players choose which one ends up with the damage. (this is an obvious compromise to ending games in infinite loops)