I don't really believe he was ever off tbh, probably more agent talk to push the price up
Possibly, but it does make it sound like Bath genuinely thought they were in with a shot.
Equally, from all accounts, it was an unhappy camp with Gustard in charge, so it also depends when "negotiations" were happening (and yes, I know they're not allowed before January 1st, but no-one seems to care about that any more). Time-frame wise, that would make sense as well, bearing in mind that most contracts take 6-8 weeks to progress from first serious overtures to signed deal.
Early January, Bath in advanced negotiations with Smith (having been ongoing for a month or two).
20th January, Gustard leaves Quins, fortunes change over night. Presumably Smith halts talks to see how things progress in London.
23rd March, Bath announce the signing of Cipriani.
Time frames are heavily suggestive of Bath and Cipriani starting actual negotiations 0-3 weeks after Gustard left Quins.
Now, it may be that Smith never intended to sign with Bath, and his agents were stringing Bath along to bump his price at home - which is a dirty move TBH, (play it out in the press, but that sort of thing breaks trust between a club and an agent); and timings with Gustard's departure are purely coincidental.
Or it might be that Smith was unhappy under Gustard, and Bath made him a serious, potentially lengthy offer to play alongside a couple of lions and a few England regulars; but that Gustard's departure and the newly-happy home made a difference to him, with loyalty and friendship winning out.
We'll probably never know, with the possible exception of Marcus writing a book in 15 years time.