I agree with Jerry's points. In addition, I've seen this work done before. Often times when there's a problem with the original joist support for various reasons. I have yet to find one of these walls that has any real footing or foundation poured underneath it. I have found these walls sitting on top of a layer of flat bricks, sand, an inch or two of concrete or a flat 2x12.
I keep a long screwdriver in my bag. It works great for poking into the ground at an angle to see if there is any support underneath the block wall.
I'd recommend along with the SE (or not) verifying if there is proper support for the block wall (doubtful).
If the block is rotating like that but there are any cracks it the veneer wall ... it makes me wonder if the ends of the joists are so rotted that they aren't really applying load to the veneer wall, only the block wall.

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Accurate Inspections & Consulting, Inc.
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Markus Keller