Non monotonic supply curve Supply curves are usually non decreasing. For example in a electricity market, providing more capacity means turning on new production units with higher costs, see e.g. the following representation:

My question is, in what context would it make sense to have a non monotonic supply curve?
I am not an expert in micro theory. This answer is based on my limited knowledge.
Usually you don't. If the supply curve is drawn by stacking all the units of supply according to their marginal cost, as what happened in your figure, then the supply curve is monotonic by definition.
However, while the same goes to demand curve, I have actually seen non-monotonic demand curve in Becker 1991. In that paper, Becker shows that you can have non-monotonic demand curve if there is social influence so that a consumer's demand depends on demands by other consumers.
In analogy, I conjecture that if there is some externality of production so that a firm's marginal cost depends on other counterparts to some degree, there might be non-monotonic supply curve. But I don't know such a paper. I expect some other experts could give a real example from the literature.