An abbreviated form of the idiomatic expression "The eyes may deceive, but the nose knows." This phrase has acquired several different meanings over time.
In full, it serves as a reminder that when you feel you cannot trust one of your senses, you may well rely upon another. One example can be found with cooking, where vision does not reveal when the food is "ready" but olfaction does. Similarly, you may not be able to see the food burning while you're watching it cook, but you know it's happening because you can smell it.
By itself, "the nose knows" can simply mean that an odor has made something that you weren't looking for obvious. For example, the harmless but foul-smelling gas mercaptan (methanethiol) is deliberately added to the delivery of natural gas (methane) to make its presence detectable by scent, as it is naturally invisible and odorless.
This expression can also be used to indicate that a speaker or presenter is already aware of something that an addressee or questioner suspects or believes they are not.
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