I've had this same exact problem with spalling cinder block foundation walls. The crux of the problem is that cinder block is inferior to concrete block and is softer, so when the surrounding mortar (which is harder than the cinder block) is dampened by winter moisture and freezes, it expands at great force and pinches the surface of the cinder block and forces it to shear off in a thin layer, thus causing the cement plaster to fall off with it. If the basement is finished with interior wall finish and/or insulation, that worsens the problem all the more because the warmer interior basement air is unable to migrate through the masonry wall and provide a small amount of heat to prevent the mortar from freezing and expanding.
I've been patching my foundation walls for years and even had a mason install metal diamond mesh lath and cement plaster over the existing surface and even that hasn't helped, although the lath supports the plaster to keep it from falling off. The contractor also wasn't careful enough to fold the lath over the corners to brace the plaster and now I have cracks at all of the corner locations. I've considered several possible solutions, including the most drastic which would be to replace the upper 3 courses of cinder block with concrete block in strategic 4-foot sections at a time to keep the house sufficiently supported, or possibly breaking out half the depth of the block and filling the cores solid with concrete (perhaps also using rebar), then re-plastering. But these solutions would require the approval of a licensed engineer and the local engineering dept. I've also considered cutting the mortar from the outer surface joints and replacing it with a type of mortar that's softer than the cinder block to prevent spalling. The problem is that if the existing mortar freezes, the spalling will recur regardless of anything so long as the cinder block remains. I've also considered covering the foundation with rigid insulation with the hope that its R-value would suffice to prevent the mortar from freezing and then with cement board panels and plaster, but I have only about 1-1/4" from the face of the foundation to the edge of the siding and the result would never look right depending on the thickness of the insulation panels. Finally, perhaps one last solution would be to build a brick or stone knee wall on its own footing in front of the foundation wall with insulation behind to protect and conceal the foundation, and the new surface would of course protrude and I'd need to place a Z-flashing under the edge of the siding to prevent water from seeping behind the new surface. Tough problem to address, that's for sure, not to mention uncertain results and cost.