I did this myself in my house
First of all, process is not smelly (well, almost; there is some very light smell (nothing unpleasant though), but no "fumes"). But, it is extremely dusty. When I was pulling tiles out, I had all floor covered with quite thick layer of water hoping to prevent dust. Well, it works to some extent when you pop tiles up - dust was minimal (but still there was some). But you cannot lay new tile over old mortar/thinset - it has to be removed. And
that process is extremely dusty no matter what you do. Even with floor covered with water dust still goes into the air and in quite big amounts. I was wearing the best painters mask available, and still was coughing out dust after I was done with thinset removal. There is no way in the world I would recommend pregnant woman to be around during the process.
Putting new tile, on another hand, is completely dust-free (provided you mix new thinset outdoors or in the garage).