Generated by SassMeister.com.

SassMeister-input.scss

// ----
// Sass (v3.4.6)
// Compass (v1.0.1)
// ----

.block1 {
  &__element {
    color: red;
    &--modifier {
      color: blue;
    }
  }
}

.block2 {
  #{&}__element {
    color: red;
    #{&}--modifier {
      color: blue;
    }
  }
}

SassMeister-output.css

.block1__element {
  color: red;
}
.block1__element--modifier {
  color: blue;
}

.block2 .block2__element {
  color: red;
}
.block2 .block2__element .block2 .block2__element--modifier {
  color: blue;
}