Why you need one
A live plan gets updated every week. If you only keep the current plan, you will never know how far it has moved: the delay disappears the moment someone changes the dates. The baseline is the reference nobody touches.
An example
Installing a packaging line is approved with a handover date of April 30, and in June it is still open. The baseline shows where the variance started: in the electrical work, which ran three weeks over. Not in commissioning, which is what everyone remembers.
When to change it
Only when the commitment changes: the customer expands the scope or agrees to a new date. Then you save a new baseline, and it is worth writing down why it changed.
The usual mistake
Resetting the baseline every time the project slips. That way the project is always “on schedule” and nobody learns anything. You change it because the agreement changed, not because reality did.