Building a template engine in a template engine is like getting a semi truck and then towing it around with a pickup truck. Bluntly, it’s stupid.
I disagree. It’s more analogous to building a more abstract language ontop of a lower level langauge, just as the evolution of every language to date has proceeded. 
The goal of “separating PHP from HTML” is manifest ignorance and nothing more. PHP, especially PHP short tags, is no harder to read than smarty’s markup. I’m not against learning new markups either - but only when there’s a point to the effort. With smarty there’s not.
- Template inheritence
- Client editable templates
And I’ve yet to meet one designer who was smart enough to grok smarty and too stupid to handle PHP short tags. So why inflict yet another syntax on the team.
If you don’t need either of the above two requirements, then using PHP alternative syntax is probably the better choice.
Cheers,
Alex