input.scss

@use "sass:string";
@use "sass:selector";

@mixin with-block-modifier($modifier) {
  $selector: #{&};
  $pseudo: string.index($selector, '::');
  
  @if ($pseudo) {
    $selector: string.slice($selector, 0, $pseudo - 1);
    $pseudo: string.slice(#{&}, $pseudo);
  }
  
  $offset: string.index($selector, '__');

  @if ($offset) {
    @at-root #{string.slice($selector, 0, $offset - 1)}--#{$modifier} #{$selector}#{$pseudo} {
      @content
    }
  } @else {
    $offset: string.index($selector, '--');
    @if ($offset) {
      @at-root #{$selector}#{string.slice($selector, 0, string.index($selector, '--') - 1)}--#{$modifier}#{$pseudo} {
        @content
      }
    } @else if ($pseudo) {
      @at-root #{$selector}#{$selector}--#{$modifier}#{$pseudo} {
        @content
      }
    }
  }
}


.block {
    &--modifier {
        color: red;
        
        @include with-block-modifier('bad') {
            color: white;
        }
        
        &::after {
            @include with-block-modifier('baz') {
                color: orange;
            }
        }
    }
    
    &__element {
        @include with-block-modifier('test') {
            color: green;
        }
        
        &::after {
            @include with-block-modifier('bar') {
                color: teal;
            }
        }
        
        &--modifier {
            @include with-block-modifier('lol') {
                color: black; 
            }
        }
    }
    
    &::before {
        color: pink;
        
        @include with-block-modifier('foo') {
            color: hotpink; 
        }
    }
}

output.css

.block--modifier {
  color: red;
}
.block--modifier.block--bad {
  color: white;
}

.block--modifier.block--baz::after {
  color: orange;
}

.block--test .block__element {
  color: green;
}

.block--bar .block__element::after {
  color: teal;
}

.block--lol .block__element--modifier {
  color: black;
}

.block::before {
  color: pink;
}
.block.block--foo::before {
  color: hotpink;
}

settings.json

{
  "sass": {
    "compiler": "dart-sass/1.32.12",
    "extensions": {},
    "syntax": "SCSS",
    "outputStyle": "expanded"
  },
  "autoprefixer": false
}