When to use CustomEditor?

When to buy your own car and when to use public transportation? It's up to you.

A custom editor allows you to add custom functionality to the inspector window. What this custom funcionality might look like is up to you. Examples are all the built-in custom editors for example the Terrain or Material editor. It doesn't just list all serialized data but provide context specific GUI controls which makes it simpler to work with. In the case of the Terrain editor it even adds a huge field of functions which let you edit the terrain object in the sceneview.

Custom editors have no influence on your actual game. They provide extensions for the editor.

If you need some more general information about the ImGUI system, have a look at my GUI crash course.

A custom editor is like medication. It can be used to "cure" some problems you might have with the Unity editor. However it's not a specific medication like "Aspirin". The Material editor is like Aspirin. It's a concrete solution for a concrete problem. A custom editor in general is just like medication in general.

If you don't have a concrete problem inside the editor you want to solve, you don't need custom editor.