I see this term used a lot in animation scripts and I don't think it means what people think it means. Here is a recent excample used in a script:
CARL'S ROOM - MOMENTS LATER CLOSE ON a TV - Over a graphic of Rabidillo, A CNN TYPE ANCHOR announces...
This just in! Wildly popular rock band Rabidillo has split up! Eye witnesses say it's all because of THIS purported 'FAN'... The graphic RIPS in pieces to reveal a full frame
FREEZE of C2's face fills the screen...
SMASH CUT TO C.U. Carl tearing his hair out:
I'm goin' down in history as the guy who split up the greatest rock band ever!
A Smash Cut is used to convey a quick emotional change or destruction. Example:
victim trips and falls. The killer enters the forest clearing, taking a moment to savor this death. The victim shakes her head, as if begging for the killer to change his mind. But no, he closes in, a black cloaked arm raising the knife into the air. The knife catches the moonlight for just a moment before it races downwards.
SMASH CUT TO:
EXT. WOODLAND HIGH SCHOOL COURTYARD - DAY
It's a bright and beautiful morning and kids wander the courtyard on their way to class or to meet friends.
The first example is not a smash cut. It is simply a cut.
It's not a common form of transition in film, other than horror movies, let alone animation but the term gets used constantly. It is a good way of implying distress without actualy seeing it. Sometimes this can be more intense than a more obvious visual.