Interesting, but I think that it's unlikely someone would say that an ordinary wooden pencil was smashed, short of some more catastrophic action. A pencil might have broken, but not smashed.

"We fired the pencil at a brick wall and it smashed" ... okay, it's probably the pencil that smashed.

Perhaps a mechanical pencil, but again, that seems odd and unlikely.

All of this requires a whole lot of knowledge about the world:

- Pencils are generally made from wood, wood is a material that's more likely to deform or break rather than shatter

- Tables can have tops that are made from materials that are more likely to shatter than deform/absorb the shock.

My first intuition is that ‘it’ refers to an unmentioned object, one so fragile that it can be smashed by a falling pencil. Some kind of toothpick architectural model maybe?

In normal conversation you’d just ask for clarification

”The pencil or the table?” ”Yes.”

Random, but this made me think of the Big Daddy Kane line, "When my pen hits the paper, ahh shit".

You reject it as semantically implausible.

Not necessarily, in this case I didn't reject the phrase "I dropped the pencil on the table and it smashed." as semantically implausible because of its context (it was used close to similar-looking phrases). Of course that it doesn't inform us anything about any "pencil" nor "table", but it does inform us about the limits (or non-limits) of AI.

In that context smashed probably takes on a different meaning as a sound, and the sentence semantics are equivalent to "the pen clattered loudly on the table". Similar to how the word would work if someone talked about "the smash of cymbals". It would be an awkward sentence though.