You can tell someone their idea is substandard without inferring their stupid, which is generally taken to be an insult. Tact in communication does matter. I don't think anyone needs to say "that is just stupid" to get a point across.
I've had plenty of tough conversations with colleagues where it was paramount to filter through ideas, and determining viable ones was really important. Not once did anyone have to punch at someone's intelligence to make the point. Even the simple "Thats a bad idea" is better than that.
>whenever the situation warrants it
Which will of course be up to interpretation by just about everyone. Thats the problem with so called "honest"[0] conversation. By using better language you can avoid this problem entirely without demeaning someone. Communication is a skill that be learned.
>The Linux kernel would be absolutely trash if Linus were not allowed to be Linus. Some contexts do and must require a high level of expertise before you can collaborate properly in them.
Linus took a sabbatical in 2018 to work on his communication and lack of emotional empathy. He's had to make changes or he absolutely risked losing the respect of his peers and others he respected. He has worked on improving his communication.
To follow Linus as an example, would be to work on communication and emotional empathy. Not disregard your peers.
[0]: Most often, I find people who are adamant about this line of thinking tend to want an excuse to be rude without accountability.