When we reach for it
Self-hosted observability, and estates where the telemetry has to stay on the client’s own infrastructure. The scrape model fits container estates well, where workloads come and go faster than any static configuration can track them.
When we would argue against it
High-cardinality data such as per-user labels. That is what tracing is for, and the failure is a memory exhaustion rather than a warning. Long-term storage needs a deliberate answer too; it is a metrics database, not an archive.
What it looks like in delivery
Alert rules in version control and reviewed, so an alert that pages someone has been agreed by someone. Alerts written against symptoms a user would notice rather than against causes an engineer finds interesting, which is what keeps a pager rota survivable.