Generated by SassMeister.com.

input.scss

@use "sass:list";

@function is-variable-ref($string) {
    @return str-slice(#{$string}, 0, 2) == '--';
}

@function is-variable($string) {
    @return str-slice(#{$string}, 0, 3) == 'var';
}

@function str-replace($string, $search, $replace: '') {
    $index: str-index($string, $search);

    @if $index {
        @return str-slice($string, 1, $index - 1) + $replace +
            str-replace(str-slice($string, $index + str-length($search)), $search, $replace);
    }

    @return $string;
}

@function var-list($values...) {
    $result: '';
    @each $value in $values {
        $is-first: $value == list.nth($values, 1);
        $is-last: $value == list.nth($values, -1);
        $is-variable-ref: is-variable-ref($value);
        $is-variable: is-variable($value);
        $append-value: $value;

        // Make sure CSS Variables are passed as `--my-var`, not `var(--my-var)`.
        @if $is-variable {
            $clean-value: str-replace("#{str-replace($value, 'var(')}", ')');
            @error ("#{$value} is not valid. Please provide just the reference to the CSS Variable name (i.e., #{$clean-value}).");
        }

        // Make sure all arguments, except for the last one, are CSS Variable references
        @if not $is-variable-ref and not $is-last {
            @error ("#{$value} is not valid. All but the last argument must be a reference to a CSS Variable");
        }

        // Build the value to add to the result
        @if $is-variable-ref and not $is-last {
            $append-value: unquote('var(#{$value}, FALLBACK)');
        } @else if $is-variable-ref {
            $append-value: unquote('var(#{$value})');
        } @else {
            $append-value: $value;
        }

        $result: if($is-first, $append-value, str-replace($result, 'FALLBACK', $append-value));
    }

    @return $result;
}

body {
    background: var-list(--color-yellow, --color-red, #990000);
    color: var-list(--color-yellow, --color-red, --color-brown);
    margin: var-list(--scale-margin, 15px);
    background: var-list(red);
}

output.css

body {
  background: var(--color-yellow, var(--color-red, #990000));
  color: var(--color-yellow, var(--color-red, var(--color-brown)));
  margin: var(--scale-margin, 15px);
  background: red;
}

settings.json

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