Enforcing the orders in council... simple as that.
War is brutal, even, most especially probably, when the effects of strategy implementation affects the population of an ally.
That would be the Royal Navy enforcing an embargo not a blockade. The RN was in very poor shape to enforce any coastal trade. Smith only had a single frigate in his entire fleet; everything else were big ships of the line. The only thing they could stop would other big ships, and the only ships of that description left at Lisbon harbor were the remains of the Russian Mediterranean fleet.... the Med. which, you were right, is what led me to take a look at the situation in some depth. My whole entry point into this mess started with a single Russian artillery officer who landed in Naples 1805 and stayed around for a while. It wouldn't be out of the question that my guy, Figner, was on those ships in Lisbon.
By the way, the threat of an British all-forces attack was just that.. a threat. With only one frigate, there was little that Smith could do other than sit outside. The entry fortifications were considered overwhelming for a large ship forced to a specific path. Smith saw that, under the then current circumstances, there was no safe way of utilizing the Army (an army with no calvary by the way.) So, it was all a big bluff... that worked. Remember, according to Napoleon, it's the "INFAMOUS" Sir Sidney Smith (29th bulletin of the Grand Army, 1806, Berlin) London sent their big hitter.