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Dual Smokestacks says that my opponent chooses to "Do 1 damage to each enemy" or "Do 2 damage to an enemy of your choice". The enemy of my enemy is myself, so does this mean that Dual Smokestacks does damage to my characters?

No. Your opponent is choosing which operation you will perform. Your opponent's characters will be the ones that have damage done to them.
Source: Aequitas (2022-09-15)    【Link to Ruling】
Tags: Dual Smokestacks