Formocresol pulpotomy is most appropriately indicated in primary teeth with vital pulp tissue and no signs of inflammation or infection. This procedure aims to preserve the radicular pulp by removing only the coronal pulp, promoting healing and maintaining the tooth until natural exfoliation. It is contraindicated in teeth with signs of irreversible pulpitis, necrosis, or periapical pathology due to the risk of failure and infection. Thus, it is ideal for cases where the pulp is healthy or only mildly inflamed, allowing for effective dentin bridge formation and maintaining tooth integrity.

Reference: Glenner G. Pediatric Dentistry: Infancy through Adolescence, 6th Edition.