There is allot of disagreement on when to use or avoid the no lynch vote. It is generally accepted that it helps the town only in a few end-game scenarios.

For example if there are 4 remaining players and 1 is mafia a no lynch followed by a mafia kill would leave 3 live players and 1 mafia. These are better odds to find the remaining mafia member with.

If the town had voted off the wrong person the first night instead of voting no lynch and the mafia made a successful kill; there would only be 2 people left alive resulting in a mafia win.