I think spalling is generally a result of moisture, penetrating into the bricks. When there is a freeze cycle, the expansion of the water inside the porous brick causes a chunk to spall off.
One combats this by sealing the masonry, so the water can't penetrate. Your wall should, in my opinion, have a heavy waterproof coating on the inside, against the soil, and be clear sealed on top and the exposed side. Don't neglect to provide the weep holes that allow water already inside the wall to escape again.
Bricks that are already broken need to be cut out and replaced. Personally, I like to use a mortar mixture that is higher in lime. Lime based mortars are more resilient, and adaptive than high portland based mortars.
I don't personally like the idea of parging or painting brick, although parging is essential to certain cement block construction methods. The coating can hold moisture IN, and cause more problems than protection. I consider a painted or parged brick wall to be a statement that there are deeper problems.