Can someone suggest when should I choose Mongo and not default SQL for xDB with Sitecore 9 update 1?
You should never choose MongoDB for xDB in Sitecore 9 Update 1, because the only supported xDB provider is SQL (either SQL Server or SQL Azure).
See the Installation Guide:
Sitecore XP 9.0 Update 1 does not currently support MongoDB or Oracle databases for the Experience Database (xDB). Support will be added in future versions of Sitecore.