These NDR responses are related to Declude (a third-party Anti-Spam product not related to SmarterMail but commonly installed alongside SmarterMail).
The Outlook Blank Folding Vulnerability occurs when there is a line in the headers with just a single space or a single tab. Older versions of Outlook (2000 and before) & Outlook Express could treat this as the end of headers, potentially allowing it to execute a virus that is embedded in the headers upon message preview. RFC2822 3.2.3 says that it is not valid to have such lines, nor is there any legitimate reason for an E-mail to contain a blank line in the headers with a single space or tab.
However, that said, this vulnerability was never likely exploited in the wild and probably is no longer a threat as older versions of Outlook were either patched and modern E-mail clients don't have the same vulnerability. Likewise, for whatever reason, many legitimate emails do end up having a blank line with a single space or tab in the headers (I know back in the day the Incredimail E-Mail client did this). As such, it will give you plenty of false-positives.
We disabled this in Declude back in 2007 on our Mail Servers.
You can remove this by going to your \Declude directory and add the following line to your VIRUS.CFG file:
ALLOWVULNERABILITY OLBLANKFOLDING