Your observation is correct, smart collections are not shown when using "show in collection".
A smart collection is actualy a defined database query, which is automatically executed by the system at runtime, aka "dynamic".
For reasons unknown not yet resolved, already reported during lr 3 beta.
Apparently for Adobe this has a low priority to fix.
From what i observed in forums and from contacts with LR users, collections and even more smart collections are not that widely used.