Coming back to this thread today, it's funny to see that now there are more people saying that really Nike should be the one that has a problem with this, not Adidas. I do see why Nike wouldn't want a coach they're paying spending time coaching an athlete sponsored by another brand, but since Nike has already agreed to that for Smith's current runners it's a moot point.
I still don't see why Adidas would care - today Nico is coached by someone who doesn't work for Adidas and trains with a bunch of other runners who are not sponsored by Adidas, and that will be exactly the same after this. Frankly, this arrangement will allow Smith to have more time to focus on Nico since he won't be coaching a college team anymore. You could argue Adidas is getting the benefit of having Nico train will a full-time pro coach and team without having to exclusively pay for that coach/team.