Generated by SassMeister.com.

SassMeister-input.scss

// ----
// Sass (v3.4.21)
// Compass (v1.0.3)
// ----

/* test one */
.pfx {
  &__one &{
    &__two {
      color: red;
    }
    > &__two {
      color: blue;
    }
  }
}

/* test two */
.pfx2 {
  // Isn't this
  &__one & {
    > &__two {
      color: red;
    }
  }
  // The same as this?
  &__one > &__two {
    color: blue;
  }
  // The latter produces the expected output, the former being the same as the example
}

SassMeister-output.css

/* test one */
.pfx__one .pfx__two {
  color: red;
}
> .pfx__one .pfx__two {
  color: blue;
}

/* test two */
> .pfx2__one .pfx2__two {
  color: red;
}
.pfx2__one > .pfx2__two {
  color: blue;
}