I tried to smooth contour line using Smooth line tool.
the DEM cell size is : 18 meter
the minimum distance between two close contour lines is : 3.3 meter
Using BEZIER_INTERPOLATION in Smoothing Algorithm
I didn't get overlapping lines.
Using PAEK in Smoothing Algorithm
I didn't get overlapping lines in 3 meter Smoothing Tolerance.
I didn't get overlapping lines in 18 meter Smoothing Tolerance.
I get 1 overlapping line in 50 meter Smoothing Tolerance.