Can prevent a restore, whereas doing the update with auto commit guarantees a restore on (mostly) every error you make

Exactly. Restores often result in system downtime and may take hours and involve lots of people. The backup might not have the latest data either, and restoring to a single table you screwed up may not be feasible or come with risk of inconsistent data being loaded. Even if you just created the backup before your statement, what about the transaction coming in while you're working and after you realize your error? Can you restore without impacting those?

You want to avoid all of that if possible. If you're mucking with data that you'll have to restore if you mess up, production or not, you should be working with an open transaction. As you said... if you see an unexpected number of rows updated, easy to rollback. And you can run queries after you've modified the data to confirm your table contains data as you expect now. Something surprising... rollback and re-think what you're doing. Better to never touch a backup and not shoot yourself in the foot and your data in the face all due to a stupid, easily preventable mistake.