Damp coming through concrete block retaining wall

When was that wall built and when did the water start to seep through like that? Is it isolated to a patch or is it relatively consitant along the wall, as far as you can tell? Also what part of the country are you in?

I'm wondering that it's a new phenomenon, it might be an indication of a mains leak or even something seasonal like a spring or even just the 'normal' water table.

It has and there are indications that the issue has been ongoing for some time by the way that the salts/calcium deposits have started to harden. A recent change to the land up-hill from this point may have had a bearing.

Blocks aren't waterproof. Any block retaining wall will let moisture to bleed through.

If it was an internal wall it would be tanked, but being a garden wall there's no requirement. I wouldn't fancy your chances chasing a warranty on this.

its not going to fail, where are you getting this notion from, its purpose is to retain soil not water

The coating is the tanking I mentioned. They could have applied it, but it’s expensive and of little benefit when the wall is exposed to weather on both sides.

similarly, I would not bother with water proof tape under the timber. They’re be exposed to far more water from the rain

A piece of visqueen/DPM at the back of the vertical supports will prevent the water from tracking across and I believe that it will prolong the life of the cladding. As long as there is room for air flow behind the cladding then, it should dry off fine.

Of course, water is dense. Retaining it creates work.
But water weeping though a wall, means the wall will be damp. Other than moss/algae growth. This shouldn't be an issue