Your reaction is probably what your husband expected from you, and therefore he chose not to bring it up. And there's nothing about your feelings and reasoning that is "wrong." (Of course your concerns are absolutely right!) It's just not in line with reality as your husband is experiencing it.
If you're not smelling tobacco on his breath, skin and clothing, he's probably not smoking much. He may even be taking most of his smoke breaks at work, both to socialize and to relieve stress. I've never smoked, but understand it can be quite a relaxer.
Your reaction would be more likely to add to your husband's stress than relieve it. A calmer conversation, free of blame and maybe even expressing concern for his needs, will probably take you farther toward a solution. He will have less need to feel defensive. Once somebody's defenses go up, they are much less available to hear another person's needs, so I'd start there.
Nothing deadly will happen over the next few weeks, so this can be a slowly-developing conversation. Instead of criticizing his habit, you might ask if the two of you together can start to adopt some new, healthier habits. Taking walks after dinner or with the kids after he gets home from work. Giving each other relaxing massages or head-rubs, perhaps with a glass of wine. (My husband and I give each other foot-rubs while enjoying a video in the evening.) Finding a joke of the day, or teaching the kids jokes or new games to share with Dad; strong family connections will give him terrific "reasons" to take the best possible care of himself.
All in all, the focus will best remain on you and the kids in the most positive possible light. Let him know how much you love and appreciate him. Don't nag – that tends to drive people more deeply into negative responses, weaken emotional ties, and increase defensiveness.
Nicotine is one of the toughest addictions to beat. And people who do beat it succeed for positive reasons. We all tend to stay in denial about the negative effects of our behaviors, which are way off in the vague future, if the rewards of the behavior meet some more immediate need.