Can the concrete foundation wall in the image be considered as a laterally supported at top? If not, then what are my options to design it as anything but a cantilever retaining wall?
Agree with EireChch, not laterally supported as shown.
Options? Here are two, both assume the horizontal floor beams can resist horizontal lateral force. Otherwise, the building may just rack (be pushed out of shape).
In each house I have lived in and built I have added stacked 2 x's under the ends of floor joists against the wall. That added significant horizontal resistance to top of wall possibly moving in, Of course do both sides.
Thank you all for your replies. From my original question, you will know that I was expecting the answers you gave me! I would rather go with the design of a cantilever retaining wall with building gravity loads acting on the wall.