The cracking would imply a drying problem. I would think that the cornice was primed improperly. If the primer was of cheap quality or the painter used a paint with a built in primer for drywall. The primer may have not effectively sealed the plaster. Then the drying of the paint would be effected, basically the plaster sucking out the moisture to quickly. this could cause the paint shrink and crack as it dried.
Answer to comment.
You have to fill the cracks. either by sanding them out or filling them. If sanding isn't an option try coating an area with a light coat of mud and after it drys lightly wipe it smooth with a damp cloth. Then repaint starting with a good sealer, kiltz would probably do.
A type of self leveling paint might work without all the mud filling, but It depends on the size of the cracks. I would sample a couple areas to see what works best.
There are paints that claim to have this ability. I would still start with a good primer/sealer before anything.
Cashmere
This is not an endorsement of the paint only an example of what to look for. I have never used it.
There are (at least) two different types of stains for concrete. One is a surface coating, the other is acid etching.
The former can work, but isn't as durable/lasting. I believe most of the products you get at the big-box stores are more of a top-coat type of stain.
Acid etching is just that, it's a stain containing an acid that actually etches the concrete. This is the typical type of stain you see in home magazines and such. The etching provides a deeper stain that is more durable and not prone to flaking.
I've done the latter, and applying it is super-easy. It's the prep work that can be a chore--namely if you have adhesive on the concrete already. In our case, we has tile mastic, which we had to dissolve using soybean based stripper. It worked great but was incredibly messy.
If you don't have glue to deal with, however, you should be good to go. Order up the stain (lots of places online to get it). You then dilute it per instructions and spray it on the concrete. I used a garden sprayer for this. You then let it sit for a period of time, and then you apply a neutralizer to stop the reaction.
After that, you apply water and mop/squeegee/wet-vac it up.
Then, you apply a sealer of some sorts. Common options are wax-based, polyurethane, and epoxy. I went with poly as it was relatively easy to apply (roll it on). That said, I don't think it was ever truly waterproof. For your needs, you may want to go the epoxy route.
Best Answer
The damaged area could have been the place the shower head pipe may have originally projected out of the wall. When the rain type show head was installed it may have been moved to a lower level.
If this is the case then the damage that you see is just a shoddy hole repair. Fixing it up so that it looks decent will involve scraping, sanding and repainting the area as a minimum. Worst case it may mean removing the old patch and filling in with a replacement patch that was done correctly. Patch technique will depend somewhat on the type of wall it is. You mentioned plaster - is it on lathe or plaster backer board of some type?