"why blocks and bricks have been used with mortar totally encasing the brick"
Wienerberger don't for their porotherm blocks. Also I have seen bricklayers always place very small amounts of mortar on the two perp edges of the block face, hardly bigger than a pencil. So it seems to me that mortar on the vertical joint is not required for strength, but only to provide a seal.
"thermal movement"
I don't know what you mean. Why is a hx wall more prone to thermal issues than a hand built one?
"articulation joints or control joints"
Do you really think it is not possible for the CAD model to specify these joints and hx place the blocks appropriately according to the model?
"human intervention"
What extra intervention does a hx wall require?
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