Tobacco and smoking are detrimental to the development of your muscles. Smoking causes respiratory problems, meaning that it is harder for smokers to breathe than non-smokers. If you have trouble breathing, there is less oxygen going to your muscles and you have less energy. If you have less energy, than it is harder for you to develop your muscles. Smoking means that you cannot train your muscles for as long.
Smoking in general destroys pretty much all types of body cells, which include your muscle cells. Your heart itself is a muscle, and tobacco/smoking create numerous problems for your heart and lead to diseases. Smokers are also more likely to have back and muscle pain than non smokers, because their cells are constantly being damaged. Smokers also have a reduced blood flow, so there is less blood coming/going to the bones and muscles.
Smokers are more likely to develop lupus than non smokers. Lupus is a disease which effects the joints, and will make it more difficult for you to move. Smokers are also more likely to develop arthritis, which is similar to lupus and effects your joints.
Overall, smoking does not directly damage your muscle system, however it causes numerous other diseases and problems which end up creating a problem for your muscles. If you are a body builder or athlete, smoking is something you should quit immediately because it is holding you back from your full physical potential and you will never reach the level you are capable of if you continue to smoke.