They definitely improve their health, and since they won't cause anybody to commit passive smoking I suppose they'd improve the health of those around them.
If they have emphysema or bronchitis already, quitting will reduce the effect it has on them (emphysema is a disease of the alveoli, bronchitis of the bronchae). The carbon monoxide in the smoke also would no longer bind with hemoglobin in their blood to form carboxyhemoglobin, wasting oxygen that could be used for respiration, so they get more tired easily etc.