Symptoms

When using a SmartObject as a destination on a client step, if you package and deploy the solution using the SP PandD tooling, you will see the error when deploying the workflow in the target environment. (Even if you don't make any changes to the workflow.)
 

Diagnoses

After deploying the SP PandD package to the target environment, the destination "InitData" settings expression is updated incorrectly. "Blank values" are ignored and a new expression is compiled to contain less information than before.

As a "temporary workaround", you can "rip and replace" (Delete and re-configure) all destinations that use SmartObjects on the target environment. After you have done this, you should be able to deploy again.

 

Resolution

This was diagnosed as a bug and has been addressed in the February Cumulative Update (CU) > Fix Pack 6 (FP6). If you run into this issue, please log a new support ticket and request the February CU, with FP6 (Or later)

Additional Information: You will have to install the February CU AND FP6 on ALL machines that contain K2 components. ("Client machines" included.) The CU and FP6 is "smart" enough to detect which components are installed on the machine in question, and will update accordingly.