Putting @Bry’s explanation slightly differently-
If your outlet that you have now is a GFCI outlet (has the test and reset buttons on it), then this wiring scheme has it providing GFCI protection to other outlets or devices. Power goes into the outlet, gets GFCI protected, then goes out to other devices.
If you wire it like you have in the picture it will work, but those downstream outlets WON’T have GFCI protection. This may be a code violation, and isn’t as safe.
The solution would be to provide GFCI protection upstream of the smart outlet- IE at the breaker. You can replace your normal circuit breaker with a GFCI breaker. Wiring that is a bit different than a normal breaker as the neutral wire has to go back into the breaker itself. You can also put a standalone GFCI unit upstream of this outlet- they make some that take a single gang box and JUST have the test and reset buttons. Or you could just install another outlet above/below/beside this one, so one outlet is the GFCI outlet, then next is the smart outlet, then next after that is the other downstream lines.