What type of exterior coating will allow water vapor to pass through cinder block

Since concrete blocks are fairly thick, I'd drill several holes along the line you want to cut with a masonry bit, then use a use a mini jack hammer such as a small DeWalt with a 1/2" chisel bit. The hole will not be perfect shape etc, so you will need to fill around the vent after installed with some mortar. The pilot holes will help keep the hole in a rough shape and avoid breaking off large pieces of the block. Even it some block breaks, you can fix it up after with the mortar mix.

If the cinder blocks are empty, a standard masonry drill bit in the 3/4 inch (19 mm) range plus a sawzall (which can be inexpensively rented, but you'll have to buy a blade).

Trace a duct end onto the blocks where you want the hole: it is best that the edges of the hole be at least an inch (3 cm) away from cinder block edges and mortar but can go through them.

Drill the 3/4 inch pilot hole inside but near the circle's line. Use care to get it square (perpendicular) all the way through and press lightly as it passes through the opposite face. (If you drill the hole right on the line, there will be an unsightly gap to deal with later.)

Place sawzall into the hole and—if you haven't used one before, practice by cutting toward the center of the circle—cutting slowly to avoid fracturing the brittle material. Until you get a feel for how much chipping it does, stay safely away from the line—an inch should be enough at first. (See example video.)

The hole need not be big enough for the full height of the sawzall blade. It can be started in about half its full width.

When cutting through the block edges and mortar, angle the saw as shown. Repeat from other side to finish cutting through.