Awesome write up Eke Victor, I didn't know of Koala until now.

I'll like to add another way to set up SASS, if you don't mind. I think this is the only method that supports the latest version of Dart Sass, I'm not sure though. Here's how to set it up:

You could run the command on the terminal:

npm install -g sass

Then while starting a sass project, run npm install sass

Then in the package.json add the script:

 "scripts": {
    "sass": "sass --watch sass:css"
  },

The script signifies that you're watching a folder named sass and then compiling to a folder named css.

"liveSassCompile.settings.formats": [
    {
      "format": "expanded",
      "extensionName": ".css",
      "savePath": "/dist/css/"
    }
  ],
"liveSassCompile.settings.generateMap": false,