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input.scss

.MyComponent {
    $prefix: &;
    
    &ButtonWrapper {
        padding: 1rem;
        
                
        #{$prefix}Button {
            color: green;
        }
    }

}

output.css

.MyComponentButtonWrapper {
  padding: 1rem;
}
.MyComponentButtonWrapper .MyComponentButton {
  color: green;
}

settings.json

{
  "sass": {
    "compiler": "libsass/3.5.5",
    "extensions": {},
    "syntax": "SCSS",
    "outputStyle": "expanded"
  },
  "autoprefixer": false
}