Daryl is like looking around to make sure no one can hear him flirting with Carol when he says, “Smells good.” Sure. I know people are talking to him, but I still will think whatever the hell I want.
Daryl gets embarrassed. He doesn’t want to blush in front of his “hero worshipers” as Kirkman puts them. Carol doesn’t care ‘cause she’s going to hit on him anyway.
Here’s a link to the other Long Duk Dong joke.