what does smooth/soft probablity mean?
When $T$ gets larger, i.e. $$T \rightarrow \infty $$ the probability distribution resembles the uniform distribution, so $q_i = \frac{1}{n}$. You can find the proof here, as well as some other interesting properties. 

Given the previously mentioned fact, I guess he is referring to smoothing  in the sense that the noise if left out and what remains are the important patterns of the data, that is the distribution is made less 'spiky' as @Emre mentioned.