Nonlinear terms in the Schrodinger equation are used in so-called objective collapse theories. These are theories of quantum mechanics which explicitly (mathematically) specify under what conditions the famous Copenhagen wavefunction collapse happens. This is unlike the traditional Copenhagen interpretation which leaves this question unanswered, resulting in an INCOMPLETE physical theory.
Wavefunction collapse is nonlinear because we might have
$$
|\psi_1\rangle = \frac{1}{\sqrt{2}}|0\rangle + \frac{1}{\sqrt{2}}|1\rangle \rightarrow |0\rangle
$$
and
$$
|\psi_2\rangle = \frac{1}{\sqrt{4}}|0\rangle + \sqrt{\frac{3}{4}}|1\rangle \rightarrow |0\rangle
$$
but no linear operator could map both $|\psi_1\rangle$ and $|\psi_2\rangle$ to $|0\rangle$
Therefore, objective collapse theories include explicit nonlinear (and stochastic) terms into the Schrodinger equation to explain wavefunction collapse.
These theories make predictions different than regular quantum mechanics. See my answer at https://physics.stackexchange.com/a/659421/128186 for more details. In short, regular quantum mechanics says that we could perform double slit experiments with bigger and bigger objects and see interference patterns if we are able to sufficiently isolate the large particles from environmental interactions. By contrast, objective collapse theories have terms that induce wavefunction collapse if the particle becomes too "macroscopic". Here macroscopic can be defined as some combination of too massive, to spatially large, too many particles, or various other measures of macroscopicity.
Therefore, one way to test for the presence and bound the magnitude of these non-linear terms is to perform macroscopic superposition experiments, such as double slit experiments with large objects. See https://arxiv.org/abs/1410.0270.
Finally, I'll put a quick plug for a totally different approach, though I don't have a reference. Another way to test deviations from the Schrodinger equation would be to take a system with many particles and perform operations to put them into complicated superposition and entangles states and allow them to evolve under various interactions. Then, measure very precisely the final state of the system of particles and check if you get the prediction of regularly quantum mechanics. The bigger your system is and the more complicated interactions you perform the more sensitive you become to deviations from linearity of the Schrodinger equation. In fact, what I have just described is a quantum computer. A large controllable quantum system.
In summary, we can test for non-linear terms in the Schrodinger equation by performing experiments with LARGE quantum system and seeing if we get the results that are expected by regular quantum mechanics, and not the results expected by a theory with a non-linear term.