It's not exactly what I remember, but it has been 12 years after all so my memory isn't that reliable, that's probably it. Thank you!

I'm looking for a manga I read quite a few years ago. It's possible it was a oneshot. I think it had a girl (possibly on the student council) watching another girl (student council president or another council member I think?) get confessed to, then later the first girl also confesses to the second girl and says something along the lines of "your smile annoys me", because it's always fake. I can't remember much beyond that.

Technically it means "lolita" but rest is pretty much right.

That's the origin, but loli doesn't really have the same implications that lolita does. Loan words rarely have the same meaning as the word in the original language, especially in Japan.

(what a contradictory phrase; "loli" is an inherently sexual term, it doesn't mean "anime little girl" it means "lolita complex")

"Loli" doesn't mean "lolita complex", "lolicon" does (though it's also now used to refer to a style of art that appeals to lolicons). You're right that "loli" doesn't mean "anime little girl"; it just means "little girl" and that's it (including real, anime, or whatever else, sexualised or not).