The bottom half section of my garage walls are concrete and top half are regular drywalls with FG insulation. I am thinking of adding polyiso boards on all the concrete walls. This will prevent moisture from getting in the garage through concrete, but it will prevent any moisture from escaping through concrete. Should this even be a concern? I am trying to find out if there is any drawback for doing this.

Good plan, only typical drawback is there is no good way to attach to the insulation board. Consider using InSoFast, it has drainage channels on the back and you can attach a wall board to it. Should you draintile before the insulation? Moisture is not likely to leave the garage through the CMU walls.

The wall on one side of the garage is completely above grade, but the other side is half below grade (the bottom concrete part is below grade, the top drywall is above), so if I cover the concrete on this side with polyiso, will ground moisture be a concern? Like either affect the foam board itself, or affect the sill plate on top of the concrete wall through capillary action?

by the way, it's poured concrete, not masonry blocks.

These foam insulation like EPS, XPS and Polyisocyanurate absorb very little moisture and therefore do not wick. They are also unaffected by water. UV is bad for them. Should you drain tile first?