"烟消云散" is formed by combining two parallel verb-phrase structures: "烟消" (smoke disappears) and "云散" (clouds scatter). Each structure pairs a noun (烟, meaning smoke; 云, meaning clouds) with a verb (消, meaning to vanish; 散, meaning to disperse) that describes the noun's action. The juxtaposition of these two similar phrases creates a compound word where the parallel syntax reinforces the concept of complete dissipation.