Please see
http://n4.nabble.com/MSBuild-Plugin-1-3-MSBuild-no-longer-works-tc1472772.html#a1472772
for the initial report of the issue.

Since version 1.3, the MSBuild plugin tries to pass build variables as arguments to MSBuild.
The changes done to MSBuildBuilder.java in version 23118 result in a malformed command line that is then used to start MSBuild, resulting in error messages like:

MSBUILD : error MSB1006: Property is not valid.
Switch: 2

The issue practically renders MSBuild useless. All our native builds ceased to work after upgrade of the plugin.
The issue did not exist in version 1.2 of the plugin.