That sentence "yo huelo siempre bien" translates to I always smell good.
"huelo" in this sense means for the subject to have a scent, not like "I always smell something good"
The sentence "nosotros olemos las rosas del jardín" translates to we smell the roses in the garden.
in this sense, "olemos" means to physically perceive a smell
So it has two meanings kind of like how it does in English, am I understanding this right?
Yes, you are right - oler can have two interpretations:
Yo huelo bien.
I smell nice.
I [can smell] well. (referring to your capacity to smell things)
If you want to say that someone smells "of/like" something, then you would use the preposition "a":
Yo huelo flores.
I [can]smell flowers.
Yo huelo a flores
I [myself] smell of flowers. (you have that scent on you)
If you follow this same thread scrolling down, you will see a similar question answered previously.
I hope this clarified it.
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