For our granny flat project we had significant hillside work – 2 seriously engineered cmu walls, and some smaller gravity walls. Here are my thoughts.
You have a footing of some kind with all of them – including the stacked block… it has to be dug out and the first course started below grade or it can shift/slip etc. Saving you on all three walls is that the wall is only 3 feet high – so not a huge footing for any of them. (We had some seriously huge footings on our project…. but they’re holding up a building slab.)
Keeping the dirt onsite is a huge saver. There is an entire sub-industry in construction buying/selling/moving fill dirt. As consumers, you pay to remove dirt and we pay to import dirt. If you can make the dirt net out even by not exporting/importing that’s a good thing.
Our super engineered CMU walls have a stucco coat. They’re ok looking… They work with the setting. We had some issues with the stucco coming off – but the contractor addressed that.
We used a Keystone Legacy block for our smaller walls… I don’t think they’re ugly, but that’s a personal taste/preference. We planted stuff that kind of laps over the top and it looks nice.