Unable to set SCSS variable to CSS variable?

Just use string interpolation:

$color-black: #000000;

body {
    --color: #{$color-black};
}

Apparently the old behaviour is not intended and violated the language specs of SASS:

• CSS variables mixed with SCSS variables don’t emit proper CSS in 4.8+
• CSS variables aren’t properly compiled
• Assigning SASS variables to CSS Variables (Custom Properties) no longer works