I update quantities when I see them, if they're clearly off. Like, if it shows 1 on the floor, 0 in back and 5 on hand, and there are 5 on the shelf, I'll update the quantity to 5.
Generally if I can tell that unaccounted for on-hands are sitting in front of me on the floor, I will update quantities. I figure that can only help people somewhere along the line. If it says there are 6 on the floor and I only see 1, I don't usually update those, because there might be some in a cart somewhere (pull, customer cart, SFS) or maybe I'll find them if I keep zoning, but if the device is showing fewer items on the floor than I can see in front of me, I update that.