Would a failed FUE hair transplant affect my existing SMP after the hair has fallen back out?

Non-growth following your FUE hair transplant would not affect your SMP results. The failure of your grafts is really just limited to the affected hair follicles which cannot grow new hair. The pigmentation from your SMP procedure would continue to remain below the surface skin layer as a separate issue. These results would still be visible on the scalp.

A failed hair transplant will only affect the implanted hair follicles. There is no reason to worry about your Scalp Micropigmentation (SMP).

I have seen many times over that patient are going for cheap hair transplantations.And very often that is how their implants look : cheap and unnatural.
The best method to resolve the problem is to shave off all hairs and have SMP restoration done.