Options for fixing leaking polybutylene water service line
I would either minimize the repair and have them spot fix the line and at that time inspect it to verify its structural integrity, or maximize the repair and run a new polyethylene pipe including going under the footing and inside properly due to the reasons mentioned.  This is invasive and will require multiple trades (concrete, excavation, possible wall repair, etc) for access and repairs but running main lines external to the wall sounds like a problem waiting to happen.

PB usually reacts with the additives to the city water and breaks down or it stays just fine.  But deterioration is usually from the inside out though so you have to cut the line to tell.  So if your line is still structurally intact there is a chance having the leak repaired could be a long term solution.

How many times can you have a leak repaired over how many years before it equals the cost of a new main line?