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If 3ds Max displays the smoothing groups correctly then it also has to convert it to DirectX and OpenGL through cutting meshes on the fly.

yes, meshes in modelers are stored in much more complicated data structures and for viewport rendering they get converted to what opengl needs all the time but game engines don't do it that way because it's much slower.

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By the way: If you split meshes then you get open meshes and althogh you got hard edges you lose the chance to use stencil shadows at the same time since stencil shadows need closed meshes.

usually there is a separate data structure for boundary information so you could have stencil shadows nevertheless. i am not sure how this works with gamestudio but stencil shadows aren't the future anyway. they have too many disadvantages.

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I thought eventually smoothing groups all boil down to the creation or splitting of extra vertices to create the smoothness, and the "tool" of smoothing groups simply automated the process, rather than creating them all by hand?

yes, that's how it works!