Repairing bubbling (blown) plaster on an interior wall
I suspect that it is caused by moisture migration through the plaster. I would definitely scrape off the damaged paint and sub material first. Check for moisture, better to use a moisture meter if possible. Look for other areas below the floor for any evidence of water infiltration.  May have been a one time thing, but I would be looking for the root cause, which I think may be water. Once you are satisfied the area is dry, remove all loose or crumbly plaster down to a solid base. If the voids are deep, I would use a thinset, setting type filler first, then a Spackle or drywall compound to get a smooth finish.