The answer is: when it's on the base of a merle. The diluted areas on a merle are often described as being "ticked", however this is not the same as T locus ticking and is just a natural part of the merle pattern.
What is the difference between merle and ticking?
Blue merle dogs will have areas of solid black, and other areas of gray (although the gray may be made of several shades, it is gray, not a mixture of black and white). Ticked dogs will have white and black hairs intermingled, with no intermediate color.
What does ticking mean in dog color?
Put another way, ticking is a pattern of colored hair (usually extremely small spots of colored hair or coat flecks) that happens inside what would otherwise be white markings. Ticking is the color you'd see if the area hadn't been white. For ticking to express itself genetically, there has to be a white spotting gene.
What does ticked mean in dogs?
Some dogs have spots on areas of white fur, commonly called “ticking”. While this is a characteristic of Dalmatians, many breeds can be spotted, such as Border Collies and American Staffordshire Terriers. Sometimes these spots can even “hide” in pigmented areas, and are not seen until the next generation.
How can you tell if a dog is merle?
The merle gene modifies the dark pigment in the eyes, occasionally changing dark eyes to blue, or part of the eye to be colored blue. Since merle causes random modifications, however, both dark-eyed, blue-eyed, and odd-colored eyes are possible. Pigmentation on paw pads and nose may be mottled by pink.