When is best to use an F-stop of 1.4 in bright conditions?

As fhotoace says, attempting f1.4 in bright sunny conditions will lead to over exposure, as the camera shutter speed cannot go fast enough.

As your experiments have shown using f1.4 for portraits gives too much of a shallow depth of field - so to get a face in focus but not the background, you'd stops down a little.

If you want a shallow depth of field in bright sunlight, you need a neutral density filter (how strong depends on light levels, but the sunny 16 rule says that at ISO 200 you'd get 1/250 at f16. If you wanted f2.8, that's a 5 stop increase in light. so you'd have to have the shutter speed at 1/8,000. If you put a 6 stop ND on the lens, you could shoot at f2.8 and 1/125.

When exactly that which you described is what you want to achieve. Really, there is no rule, "in this situation you must do that." It's entirely up to you and what you want the photo to be like.

Be aware though that even prime lenses usually don't have maximum sharpness wide open, but one to two stops down, so unless you absolutely want the shallowest possible DoF or maximum low light ability it's a good idea to step down a bit. At f/2.8 or so that lens will probably give you stellar image quality.