Well, it is something of a factor, but not all that much in practice.
The standard Harrier hover is 60ft specifically to avoid reingestion. As a consequence, it makes the Harrier a little more difficult to hover since you don't have quite the relative motion that you would lower.
You may encounter some reingestion on the way down, particularly in certain wind conditions, but it's not a huge and ever present worry.
The thing I'll be interested to see, in the VSTOL regime at least, is how engine performance is handled. In most standard day(ish) conditions, I seem to recall having VL numbers around 1.0-2.0, fuel and water. That's a clean bird.
That vid above with 5600lbs (of 7700lbs internal, a bit more than the suggested 40%) is pretty optimistic. The additional 6 Mk-82s with Gun and DECM is downright fanciful.
Of course all that matters if it matters to you. A little extra performance certainly ups the fun factor, if it downs the realism.
As for the smoke, the really cool thing would be for the smoke to increase when water was flowing, which is how it works in reality.
The external shots are pretty impressive. Looking forward to see how this one turns out!