Yes, the smiling face was a direct reaction to his passing, it probably did not exist until afterward. This is an example of an outside event interfering with a final product. The original head was screen accurate but they let emotions get involved. I agree its a smart move, its very cute and when 'MJ Fans' see it they'll be all over it. This was meant for collectors who want it to represent a specific music video and attitude not just the musician.
I guess Hot Toys could leave it as is but also offer the original head to the collectors through their website or something. Since the MJ fans probably couldn't figure it out or bother going to their website.