config.yaml

workspace-1:
  environments:
    dev: {}
    test:
      variables:
        ws-1-top-var-1:
          value: ws 1 test var value
    prod:
      variables:
        WS-1-PROD-VAR:
          value: WS 1 PROD VAR VALUE
  variables:
    # environment: {}
    ws-1-top-var-1:
      value: ws 1 top level var
workspace-2:
  variables:
    ws-2-top-var-1:
      value: ws 2 top level var 1 value AAAAAAAAAAAA
    ws-2-top-var-2:
      value: ws 2 top level var 2 value BBBBBBBBBBBB
workspace-3:
  environments:
    prod:
      variables:
        WS-3-PROD-VAR:
          value: WS 3 PROD VAR VALUE
  variables:
    WS-3-TOP-VAR:
      value: WS 3 top value
    WS-3-PROD-VAR:
      value: THIS SHOULD NOT BE FOUND SINCE IT IS DEFINED AT ENV LEVEL

main.tf

locals {
  workspace_data = yamldecode(file("./config.yaml"))

  workspace_vars = { for v in flatten(
    [for ws_name, ws_value in local.workspace_data :
      [for env_name, env_value in try(ws_value.environments, { "" : {} }) :
        [for var_name, var_value in merge(try(ws_value.variables, {}), try(env_value.variables, {})) :
          {
            ws_name : ws_name
            # ws_value : ws_value

            env_name : env_name
            # env_value : env_value

            var_name : var_name
            var_value : var_value.value
          }
        ]
      ]
    ]
  ) : join("-", compact([v.ws_name, v.env_name, v.var_name])) => v }

}

output "workspace_vars" {
  value = local.workspace_vars
}