Two distinct things share the word. The compression montage covers a passage of time (training, building, travelling), and is a convenience. The juxtaposition montage puts two unrelated images together so the audience produces a third meaning neither contains, which is the older and more interesting sense of the term.
The compression version fails when it substitutes for a beat. If the work of a story is done inside a montage, the audience has been shown a summary of the most important part. It is worth asking, of every montage, whether it is covering time or avoiding a scene.
It is disproportionately useful in generative production because it is native to the constraint: a montage is short clips joined by cuts, which is exactly what the tools produce well. That makes it a genuine strength and a trap, because a piece assembled entirely from montage has no scenes in it.
What is a montage?
A sequence of shots that compresses time or creates meaning through juxtaposition, with no continuous action. The two uses are different techniques that share a name.
When is a montage the wrong choice?
When it is covering a beat instead of covering time. If the important change happens inside the montage, the audience has been given a summary of the scene that mattered.