Well, it's pretty obvious when you shouldn't approach. For example, they may be walking quickly possibly deeply preoccupied with something. Basically if you have to step out of your way to introduce yourself, it's probably not the best time.

But in certain situations like waiting in line at starbucks, people nearby don't usually make eye contact. It's a bit too close and uncomfortable to even begin making eye contact unless they're at least 5-8 peoples away. People seem to glance away more often in close proximity, and it's harder to look back (just my experience when I try to make eye contact with someone). And if you find them mindlessly on their phone or staring at nothing in particular, it doesn't hurt to start a conversation.

It's really important that you shouldn't have to look like you're trying to start a conversation. It should just flow and be effortless. Having said that, I have the deepest respect for people who have gone out of their way to talk to strangers and getting rejected. I always thought it was stupid, but once you have seen it in person, it's a different story. They know they have a small chance, but they play their cards anyway. Most people don't have the confidence to do this, like me.