Solution:

In order to allow single-line blocks in VSCode using Prettier - Code formatter extension, please take the following steps:

1. Enable stylelint integration by adding this in the VSCode Settings (JSON): "prettier.stylelintIntegration": true
2. Install stylelint and stylelint-prettier npm modules in your project directory. npm install stylelint stylelint-prettier --save-dev
3. Add a .stylelintrc.json file at the root of your project directory with the following code:

    {
        "plugins": ["stylelint-prettier"],
        "rules": {
            "block-closing-brace-newline-after": "always-multi-line",
            "block-closing-brace-empty-line-before": "never",
            "block-closing-brace-space-before": "always",
            "block-opening-brace-space-after": "always",
            "block-opening-brace-space-before": "always",
            "block-closing-brace-newline-before": "always-multi-line",
            "block-opening-brace-newline-after": "always-multi-line",
            "indentation": 4
        }
    }

You can add/customize more stylelint rules, see the entire list of rules here.

Took me a while to understand how to configure these options, if you're starting out with stylelint, I highly recommend you read its guidelines first.

Yes, try installing vscode-css-formatter extension.
It just adds the functionality to format .css files and the shortcut stays the same Alt+Shift+F.

It turns out this was due to a seemingly-unrelated formatter:

JS-CSS-HTML Formatter

I'd forgotten I had this installed (I have about 100 extensions). Sadly, this doesn't mention SCSS or SASS anywhere in its profile. But it does mention it in a changelog update in 2016. Silly me.

I've uninstalled this extension and that's stopped the annoying formatting. I'm sure it's good at it's job, but it isn't obvious that it's doing anything and this made the problem really hard to find.

It did make me have a much-needed clean-out of my extensions, though.