Here in heart of farm country, even something rusty under the ground surface isn't something "unusual" at all for a coyote, fox, etc. to encounter. Parts from machinery come off all the time, and get put to the subsurface upon the next pass with the plow or disc.
My field edge and fencerow edge sets include lots of rusted barb wire, stained and odorous spots from gasoline and diesel fuel from farm implements, human spit and urine spots, etc. etc. etc. and the list goes on and on.
My experience is that if an odor or "visual" thing isn't associated with danger, i.e. a negative learned experience, then why would an animal have any reason to fear it save for some innate internal reaction to something "new" that they haven't experienced before? This theory I'm sure wouldn't apply in other areas less populated or that contained similar naturally occurring odors or visuals in the environment...but around here things like this are just part of the everyday scenery for these animals. Yes coyotes are naturally high-strung and paranoid, so I'm sure that new experiences really have them on edge when they encounter them.
I stopped setting with gloves, setting clothes, super clean tools, etc. a long time ago, and have noticed absolutely no decrease to my catch rate and a lot less time and hassle spent making sets.
Fence intersections in certain sections are also the same places that a local farmer/landowner uses to relieve himself at when running the tractor...I've seen him do it a million times there when I'm with him. I've also caught a lot of coyotes at the same spot. Its a great location due to funnelling of 4 different fencerows and a couple of old dirt roads into one spot in center of the section. Its full of beer cans, old pieces of rusty wire, etc. as well as the human toilet aspect. I just think none of it hurt passing coyotes through their during the night...so why should they fear this stuff at this location? In this area, a stopped truck on the roadway nearby makes coyotes high tail it out of a section way more than any odor like rust, gas, etc. Often a stopped vehicle on a county road means they will get shot at.
Maybe no rust odors normally occur near a mousehole...so they get suspicious when the two odors occur together in a new way not experienced before. I don't go out of my way to set where there is junk or a pee stain in the grass either...but I'm not obsessive about it and of course always set on decent target animal sign...if the animals are traveling there...then obviously they don't have issues with these things in that location, no matter what is lying around nearby.
I too believe that a tippy or poorly bedded trap is main cause for most flipped or dug up traps. It moved under their feet...it raises their curiosity and they check it out. An educated animal obviously that has a prior pinch experience or a face full of thrown dirt from a fired trap to relate to this movement under their feet, will react much differently. I think they could do it with a run of tippy trap experiences, too. Smell a certain lure, might mean there's something that will move close by also. I have no clue how long retention-type memory sustains in a coyotes life. I bet the more dangerous or uncomfortable something is for them, the longer they recall the experience associated with it. I'm not a coyote and can't really answer that for sure though.
Skunks have an uncanny ability to locate little hollows just under the surface...an ability that helps them locate grubs. A hollow spot under a trap pan I think tells them there may be food down there. I get a lot of "digger" skunk visits at my predator sets.
Coons are super curious, and are great at flipping. They hunt for food by flipping objects. I have more trouble from coons than anything else when I find flipped and unfired traps when running sets. Solid bedding is critical to land trapping coons, I think.
I've encountered my share of "digger" fox and coyotes, too. Hook a toe claw on a trap jaw...and the trap gets moved a little when they are digging at a dirthole for whatever smells good at the bottom of it. Maybe they did have an experience with traps before, too. Who knows? A new set with a different look or odor made nearby seems to take them in the next few days for me.
Hal Sullivan in a recent Trapper & Predator Caller article I think hit the nail on the head. He used to spend a lot of precious time going after the "smart" ones and diggers. He ended up wasting a lot of precious trapline time and effort, and often found that the old, wise, "smart" ones were actually not better animals to present to the fur buyer either. Scars, missing ears, mange spots, etc. Older wiser animals don't always translate to beautiful pelts. Leave them for "seed" is how he put it. The ability to dig traps up didn't seem to be something genetic that they could pass along to their offspring or teach them either...and he benefitted from their reproductivity tenfold by concentrating on their less-educated offspring. Its fun to match wits with a smart one...but not always something that will translate to a fatter fur check by any means, and often the knowledge you gain was only good for that particular animal anyway but not necessarily useful across the entire general critter population in the future.
Anyway...sorry to be so windy here with my two bits on this, and again what works for me isn't by any means applicable to all areas either...but because of where I trap and in these conditions, it seems to work for me.
jim-NE