shénmo pronounced as homophone of 什麼 shénme
The word 什麼 being pronounced as shénmo is not Standard Chinese (although it should be readily understandable). Therefore, the answer to


  In what contexts is this true?


is almost never, unless one is specifically transcribing a topolectical variation of Mandarin.



That being said,


Shénmo is probably a more accurate reflection of how it's pronounced among Southern Chinese speakers of Mandarin.
麼 always had another pronunciation with Pinyin mo
什麼 is quite an old word, with


Many variant pronunciations


Many variant spellings




so expect many topolectical variations!