Omg, Colliewog, I am so sorry to hear about Smidgen's miscarriage. =,( I can only imagine how disappointing this must be.
Thank goodness Smidge is doing well! She really is a stunning girl... I LOVE your Smoothies, they are some of the most well built and athletic I've ever seen... I really hope she has a big, healthy litter next time.
I have never bred dogs, but as far as the question about breeding a bitch who has absorbed a litter, it can happen for MANY reasons or none at all. I know a very reputable breeder whose bitch absorbed her litter because of a short plane flight, but she went on to produce a healthy litter the next year.