The given functional equation factored as $$(f(x)-1)(f(1/x)-1)=1.$$ Now if we let $f(x)=g(x)+1$ for some other function $g,$ then the only constrain on $g$ is $$g(x)g(1/x)=1.$$ Note that $g$ can never be zero and $(g(\pm1))^2=1.$ Also, if we know $g$ on $[-1,0)\cup(0,1],$ then this last condition determine it everywhere on on $\mathbb{R}_{\neq0}.$ Hence the general solution to this functional equation is
$$f(x)=\left\{ \begin{array}{ll} 1+g(x), &\text{if }0<|x|\lt 1\,,\\
0\text{ or }2, &\text{if }|x|=1\,,\\
1+\dfrac{1}{g\left(1/x\right)},&\text{if }|x|>1\,. \end{array} \right.$$ as mentioned in a comment. However this doesn't mean that $f$ is always piecewise or non-smooth. The condition $g(x)g(1/x)=1$ on $g$ is equivalent to say that the composition $$h(x)=\ln |g(\exp(x))|$$ is an odd-function. So, always we can take any odd function $h$ and create a nice solution to this functional equation via $f(x)=\pm\exp( h(\ln |x|))+1$ on $\mathbb{R}_{\neq0}.$ For some examples:
\begin{array}{|c|c|}
h(x) & f(x) \\
\hline
nx & \pm x^n+1 \\
n\ln\left(\dfrac{\cot^{-1}(e^x)}{\tan^{-1}(e^x)}\right) & \left(\dfrac{\pi}{2\tan^{-1}(x)}-1\right)^n+1\\
-2\tanh^{-1}(nx) & \dfrac{2}{1+n\ln |x|}, \dfrac{2n\ln |x|}{1+n\ln |x|}\\
n\sinh^{-1}(x) & \pm(\ln|x|+\sqrt{(\ln |x|)^2+1})^n+1\\
\tanh (nx) & \exp\left(\dfrac{x^{2n}-1}{x^{2n}+1}\right)+1\\
\sinh (nx) & \exp\left(\dfrac{x^{2n}-1}{2x^n}\right)+1\\
\end{array}
for any $n\in\mathbb{R}.$