How can I know when its okay to be brutally and completely honest and when I should be more "gentle" expressing my thoughts?

I think your definition of "brutal honesty" really matters here. I define it as aggressive and more direct advising, which isn't what we're supposed to do here. But regardless:I don't think brutal honesty ever really helps. You can try more straight-forward open questions instead of reflections if you're looking to really guide people, I guess. But in my experience "brutal honesty" doesn't translate well to helping people through stress. People come here looking for support. Most of them are just hoping for someone to listen to them and help them process some difficult (but not critical/crisis) situations. They don't want life makeovers. So be nice, try to read what they're looking for, and just....read the room, I guess? Maybe that's just me though.

In my personal experience, I think about who I am talking to and what kind of person they are. Are they someone who is more sensitive? Would they want you to sugar coat it or just tell them the truth no matter what? Another thing to think about is the topic at hand. Is the topic at hand something really serious? If so you should try being gentle. If It is about something that may be tough but not anything extreamly serious then I would try to assess the situation before. Also thinking about yourself when thinking about how to say things is important. How would you want someone to tell you things? That can also contribute a bit in how you address things.