Ruben Van de Voorde lays out an argument:
The PBIP format is an alternative to PBIX for storing the metadata that defines your semantic model and report. It allows more robust workflows and is far more agent-friendly, while the PBIX binary format packs everything into one file.
In this article, we argue that you should use PBIP format by default, deferring to the PBIX format only when PBIP isn’t an option.
Like when you’re using Power BI Report Server because then you’re not allowed to have nice things.