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When you don’t care about money as much as you care about other factors.
Otherwise, never.
If you can afford to take the cut- Do it. I left a job I liked for one that paid more and regretted it.
In the same position - was recently laid off and interviewing for the same position at a different agency and the cut is larger than I’d like - also in the Midwest. TBH - if offered, I think I’ll take the cut and keeping looking.
If you are more concerned about your career growth, mental health and well-being, then a salary deduction should not be a big deal. I've made the same move before. I'd say I made the right decision.
The only time I think is ok to take a salary reduction is when you are either stepping into a new field for your own interest or the long term rewards will be higher. That includes quitting a job that you are unhappy for some that you are happy.