Fractured foundation stem walls are an indication that the rebar reinforcement within the structure has corroded. The initial reaction of corrosion or rust on steel is an expansion, thereby fracturing the concrete from the inside. This failure compromises the structural integrity of the foundation.
Foundation stem walls that have not yet fractured but the surface has eroded away exposing the aggregate should be resurfaced. A stem wall in this condition is more likely to absorb moisture, eventually leading to failure.