User blog comment:Miskos3/Fairy Tail Episode 232: The Voice of Flame, Review/@comment-7418318-20150509104707/@comment-7418318-20150511070104

As you yourself pointed out in your previous post, that scene will be a longer one or several smaller ones depending on how they cut it. Smoke/mist works well in very short shots of just a few seconds, but if the scene goes on for even half a minute it's hard or impossible to explain how the clouds stay in exactly the right place to hide privates, thus I think we can pretty much rule that option out.

And I seriously doubt they'll put actual in-picture censoring like blurring, pixelating or bars in the anime.