When I originally built my garage, I had the stem wall coated with the floor, which was 100% solids epoxy and no flake so it looked just like it was painted. Over the last 16 years, where the sheetrock meets the concrete got damaged, absorbed moisture and peeled.
when I redid the interior of the garage this summer, I repaired all the sheetrock, particularly where it rested on the stemwall, covered the joint with a metal 90 degree edge (1/2” x 1”) with 1/2” inserted into the wall where the sheetrock meets the concrete block And the 1” side facing up on the sheetrock and screwed in. Then taped, mudded, sanded and painted. Finally covered both the 4” stub wall and first 2” of sheetrock with 6” cove base. Looks nice, protects the joint and will be easy to clean.
If I was building a new garage over again, I would use water resistant sheetrock for the first sheet up from the stub wall and do everything else I described above or just cover the first 3‘ or 4 ‘ from the floor up with aluminum diamond plate (not the look I wanted).

