Cannot use "plugins" block inside "subprojects" block

You are correct, the plugins { } block cannot be used within a subprojects { } block. This is a known limitation. If you want to apply the plugin to all subprojects you’ll have to use the alternate syntax.

buildscript {
  repositories {
    maven {
      url "https://plugins.gradle.org/m2/"
    }
  }
  dependencies {
    classpath "gradle.plugin.org.frege-lang:frege-gradle-plugin:0.6"
  }
}

subprojects {
   apply plugin: "org.frege-lang"
}
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