When you are no longer interested in the person.
I removed myself from the profiles of ancestors who have many other relatives listed on their profile because I'm not working on people that far back in my ancestry. I'm concentrating on brick walls from the 1800s. I know I'm not going to work on those profiles, so I remove myself from them.
I sometimes adopt orphans, improve their profiles, then wonder at some point, why is this stranger on my Watchlist? and orphan them.
I made a profile for a stranger last month, and someone emailed me asking if I had photographs of his father. I cannot remember why I initially started researching the family, but because of this contact, the researcher and I (neither of whom are related to the family) were able to connect in a meaningful way. So I'm glad I kept them on my watchlist, and I'll keep them there until I've researched them thoroughly. Then one day, I'll ask myself "why is this stranger on my watchlist?" and I'll orphan them--probably.