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The Blanks in SMG glitch is a Halo 3 sound oddity that occurs when firing the SMG. It can be observed by meleeing, and in Forge and Theater. The causes a gunfire sound to play, when no shots are actually being fired.
When wielding an SMG, it is possible to fire open blanks. One of the simplest and easiest ways to do this is to melee as you are firing the SMG, and when the gun returns to its firing position, the gunfire sound can be resonated and heard, but no bullets are used. This can also happen in Forge, when entering Edit Mode while firing an SMG. It sometimes occurs in Theater, when pausing a Film while an SMG is being fired. The sound can be heard from proximity, and will not stop until you return to Player Mode (or resume the Film, if in Theater). As you're firing the SMG, quickly go to monitor mode and then back to player mode. If done properly, you will notice that the player you shot at will take damage, but you still have all your ammo.