The bottom row of hardboard sheathing along the cement of the driveway/sidewalk has some water damage. Behind the Masonite is Buffalo Board. It appears intact, but I was wondering if I should cut out & replace any of it. A friend told me to avoid that if possible.
It seems like you have Buffalo Board (an insulative sheathing) under hardboard sheathing. Unless the Buffalo Board it structurally damaged, I’m not sure why you’d need to do anything to it other than cover it back up with a similar material to what is already there. You’ll be nailing to the studs anyway, which I’d mark the locations of (top and bottom) so you can find them later and snap lines.
You do, however, want to make sure you have adequate nailing at the outside corner where a trim board would normally go. Unless the corner was packed out with studs to accept nails, the Masonite/Buffalo sandwich may not have much nail-holding power, which you may find out later if the siding moves.