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SmartBlock does this by providing local stand-ins for blocked third-party tracking scripts. These stand-in scripts behave just enough like the original ones to make sure that the website works properly. They allow broken sites relying on the original scripts to load with their functionality intact.
The SmartBlock stand-ins are bundled with Firefox: no actual third-party content from the trackers are loaded at all, so there is no chance for them to track you this way. And, of course, the stand-ins themselves do not contain any code that would support tracking functionality.