The only time you select 'standby' is when ATC says "SQUAWK STANDBY" or after landing.
A slightly definitive answer - when it's not quite like that.
As Flying Bull pointed out, it depends on your equipment. But unless it looks like it still relies on valves, it probably won't cause a problem. In the old days it was SOP to go to STBY primarily to avoid setting off alarms on the radar displays but equipment manufacturers - of both transponders and radar processors - soon started building in what are often called 'slugs', slight delays before believing that a changed code really was the next selected code and transponders effectively switched themselves to STBY while code selections changed. In practice it means that a controller using modern kit will not see the new code until the system detects that it's stopped changing.
Just to make things a bit more complicated - not that it changes anything in practice - a modern radar tracker may use inputs from multiple sensors and has all sorts algorithms going on inside the black box to ignore questionable tx'der responses amongst other things.