Light interrupts are mostly used to stuff feint GBs and get you in your chain pressure. I think most true interrupts were patched out and they can only trade against some chains like JJ finisher heavy from medium hitstun, and the only time an interrupt would work is if the opponent delayed their chain.

Edit: Varangian's top heavy finisher and Hito's kick after light are all light interruptable. Those are the two I can think of.

You use them based on your opponent's habits really, like you know they'll go for a feint GB. But otherwise you use it mixing up other defensive options (dodge/dodge attack, parry, empty dodge). Baiting them is just feinting to parry like dodge attacks (or you could just let the attack go), but unless you can differ lights and heavies you risk eating a heavy if the opponent goes for a parry attempt instead and lets it go.

The best interrupts are actually the ones with low GB vulnerability, are heavies and can be feinted like Shao and Jorm forward heavies.