I've wondered about this for a while. I've look in Adobe's documentation, but no luck there. I've also searched here. Anyone have an idea?
Almost never. At least for photographs (graphic designers and illustrators might find great utility in the "create texture" option). The only reason, really, would be when (a) repeated attempts using the content aware option failed to produce anything other than a mess, (b) no appropriate sampling point is available for the healing brush (proper), the clone stamp or the patch tool, and (c) you're not too terribly close to an edge. There might be something about an image (or a point in an image) that makes the quasi-random nature of the content aware tool, well, have a bit of a spasm. At that point, it might be worth trying the proximity match option — the worst you'll get is CS4-quality healing.
As a user of PS, I NEVER use Content Aware Healing tool. To me, it is NOT accurate! ( I have tried it at great length) It samples tones based on mathematical calculations, which from my experience are never correct!.
If I was to use the tool to correct blemishes near the edge on a face, which happened to be on a solid background, PS will take a sample from both, the face and the background, leaving me with a mess to clear up! Same applies to healing anything near a solid structure. PS will just fuse the two tones together!