Generally the Project Management Plan is updated when there are significant changes to how you are going to execute the project. This typically comes in the form of updates to the components of the Plan, such as when you adjust your Cost Management Plan. For example, if I make a significant plan change regarding cost, and consequently need to update my Cost Management Plan, the overall Project Management Plan will need an update as well. This is most often seen with the "Big 3": cost, scope, and schedule.
I am struggling to think through how to answer questions where "Update Project Management Plan" is listed as an answer. That is such a broad option, given the large number of components to that document. I know there is no one size fits all approach but does anyone have general ideas when it is critical to update the PM Plan? Any particular processes where a PM Plan update is more likely a correct answer to a question?